PDD Iffco SFC Kota

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03
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CLEAN DEVELOPMENT MECHANISM
PROJECT DESIGN DOCUMENT FORM (CDM-PDD)
Version 03 - in effect as of: 28 July 2006

CONTENTS

A. General description of project activity

B. Application of a baseline and monitoring methodology

C. Duration of the project activity / crediting period

D. Environmental impacts

E. Stakeholders comments

ANNEXES

Annex 1: Contact information on participants in the project activity

Annex 2: Information regarding public funding

Annex 3: Baseline information

Annex 4: Monitoring plan


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SECTION A. General description of project activity

A.1 Title of the project activity:
>>
Feedstock conversion from Naphtha to Natural Gas (NG) at SFC-Kota Urea complex
Version 03
26/03/10

A.2. Description of the project activity:
>>
Introduction:

The project activity is being implemented at Shriram Fertilisers and Chemicals Plant (SFC), a
unit of DCM Shriram Consolidated Ltd. (DSCL). DCM Shriram Consolidated Ltd., is located in
India manufacturing Urea, PVC, Caustic Soda, Liquid Chlorine, Hydrochloric Acid, Sugar,
UPVC Window frames, Speciality PVC Compounds, Cement and Power production.

SFCs Ammonia Urea complex is located at Kota in the state of Rajasthan, India. The plant was
commissioned in February 1969 by Chiyoda Chemical Engineering and Construction Co. of
Japan with installed plant capacities of 450 TPD of Ammonia and 700 TPD of Urea. It was
designed to use straight run naphtha as feedstock for producing ammonia as well as fuel for
supplying thermal energy to Reformer furnace and other pre-heaters. The plant was expanded in
1974 and the capacity of Ammonia plant was increased to 600 TPD while the capacity of Urea
plant was increased to 1000 TPD.

Brief Process Description of Operation with Naphtha Feedstock:

The brief description of process while operating on naphtha feedstock is as under. More detailed
process description of Ammonia plant along-with schematic process flow diagram is enclosed as
Annexure -1.

Naphtha from suppliers is pre-fractionated and divided into two parts. Feed naphtha is de-
sulphurised to bring down the sulphur to less than 0.2 ppm maximum in Primary and Final
Sulphur Removal units. Fuel Naphtha is used as fuel for firing in Furnace. De-sulphurised
Naphtha is mixed with steam and fed to Primary Reformer where it is converted to Hydrogen
rich gas by steam reforming reaction. This is followed by Secondary Reforming with Process air
to maximize conversion of hydrocarbon to hydrogen. Carbon Monoxide is also formed during
steam reforming and is converted to Carbon dioxide in High Temperature and Low Temperature
shift reactors. Further, Carbon dioxide present in gas is removed in CO
2
Removal Unit by
absorption in hot potassium carbonate solution in CO
2
Absorber. Absorbed CO
2
is removed from
solution by steam in Regenerator.

CO
2
free gas from Absorber is introduced to Methanator where residual CO & CO
2
are converted
to Methane. Synthesis gas is compressed and introduced in Ammonia Synthesis loop. Ammonia

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synthesis takes place in Iron catalyst. Synthesised ammonia is separated by condensation at low
temperatures and condensed ammonia is stored in storage tanks.

CO2 gas from Regenerator is compressed and reacts with Ammonia in Urea Reactors to convert
partially into Urea. The unconverted Ammonia and CO2 are recovered and recycled. The Urea is
separated from aqueous Urea solution in Crystallisers, centrifuges and sent to the top of the
Prilling Tower where they are melted and sprayed from top to get urea prills for bagging.

Purpose of Project Activity:

In Ammonia plant, hydrogen and CO
2
are obtained from the processing of hydrocarbon feed. The
hydrogen is used for producing Ammonia, which further reacts with CO
2
, generated in Ammonia
plant, to produce Urea in Urea plant. As the CHR i.e. Carbon to Hydrogen ratio ( = Kg of Carbon
/ Kg of Hydrogen) of Naphtha is high at 5.45 (please see Annexure 2 for detailed calculation),
the CO
2
produced in the process is more than that required for converting Ammonia to Urea.
This excess CO
2
generated remains unutilized and is emitted to the atmosphere.

The purpose of the project is to minimize the emission of CO
2
to atmosphere by
substituting naphtha with Natural gas as feedstock. The CHR of Natural Gas is 3.011(please
see Annexure 2 for detailed calculation) which implies that it has less carbon and more
hydrogen compared to Naphtha. The switchover to NG feedstock results in lower CO
2
generation
which is just sufficient enough to meet CO
2
requirement for the Urea production and thus avoids
release of excess CO
2
into the atmosphere.

NG also replaces Naphtha fuel which is required for supplying thermal energy in furnaces. Fuel
Naphtha is replaced with Fuel NG and hydrogen rich gas thereby reducing CO
2
emissions with
flue gas from stack into the atmosphere. Thus the project activity primarily aims at significantly
reducing GHG emissions by changing the feedstock from Naphtha to Natural gas.

SFC has modified its Ammonia plant in order to use Natural gas in place of Naphtha and thus to
reduce GHG emissions through significant modifications in the Reforming section and other
areas of Ammonia Plant.

Contribution of Project Activity to Sustainable Development:

Apart from the reduction of GHGs, the project contributes in propagating the sustainable
development of the Host Country (India) as it meets the sustainable development indicators
stipulated by Government of India in the interim approval guidelines of CDM projects are as
under:

Contribution to social well being


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The project activity required significant modifications at the project site for laying down the
infrastructure for NG and at the equipment suppliers end, thereby generating direct and indirect
employment opportunities. During the construction phase, more than 18,690 man days of local
labour was utilised at site for project activities. (Please Annexure -3 for break up). SFC decided
to recruit manpower from the local communities and provide them the requisite training to
monitor and operate the modified plant. Seventeen plant operators (old and new) were trained by
external party (M/s Emerson Ltd India.) for the operation of new and modified equipment in
separate classes as well as during on the job training. (Please see Annexure -4 a giving name of
the course, faculty etc). Four Plant and Engineering Supervisors were sent to Emerson Head
Office, for advanced training on shutdown and control systems (See Annexure -4 b). Beside,
large numbers of small jobs were awarded to local contractors and service providers thus also
indirectly contributing to local well being.

In the absence of the project activity no employment would have occurred during modification
and operational phase.

Contribution to Economic well being

Production and sale of Fertilizers in India is regulated by Government of India and the fertilizer
companies in India are being provided with subsidies by the Government to ensure that the
farmers get the fertilizer at a affordable price thereby promoting development of agriculture
sector in India. Replacement of Naphtha to NG as feedstock for Urea manufacture will reduce
the subsidy payment bill of Government of India. The saved subsidy amount could be utilized for
various other social development schemes and activities of the government thereby leading to
economic well being.

Contribution to Environment well being

The project activity helps in direction of global climate change by reducing the generation of
CO
2
. Also, the Natural gas has Sulphur content of 10 ppmw ( max) whereas Naphtha has Sulphur
content of 50 ~ 100 ppmw. Use of Natural gas will significantly reduce generation and release of
Sulphur Dioxide (SO
2
) gas into atmosphere. Thus, the use of Natural Gas is significantly
beneficial for the environment and most preferred fuel at present from environment
conservational point of view. The project will also lead to marginal reduction generation of solid
waste like spent Zinc oxide catalyst due to lower sulphur content of gas

Contribution to Technological well being

Internationally, Urea manufacturing industry is mostly based on Natural gas as the feed stock.
However, most of the old Fertilizer plants installed before 1980s in India continue to use liquid
fuels like Naphtha and Fuel oil for Urea production. SFC Kota is the first old generation plant in
the private sector and second plant in India to opt for this technological up-gradation. (Letter
from Fertiliser Association of India to this effect is enclosed as Annexure -5).


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Besides leading to a significant reduction in emission of CO2 to atmosphere, Feed switchover
shall also result in improvement of plant technology. This will also encourage other Indian and
foreign Fertilizer plants to switch towards the cleaner and safer technology thus contribute
towards fight against global warming. Following technological improvements are possible with
use of NG:

1. There are lesser processing and feedstock purification steps required in case of NG. Pre
Desulphurisation Section can be stopped, thus simplifying the operation and making it
safe.

2. NG also reduces chances of catalyst poisoning, carbon letdown on catalysts as its sulfur
content and carbon content are low compared to Naphtha, thus improving the plant
reliability.

3. There is 24 hours reduction in the time taken to start up the plant thus resulting in lower
unproductive consumption.

4. Operational problems like frequent choking of Naphtha vaporizers, Reformer Burners is
eliminated.

5. Less risk of catalyst damage during emergency shutdowns as NG remains as gas and
does not condense as naphtha does on cooling.

Apart from the above direct benefits, the project shall also lead to availability of Natural gas in
the industrial city of Kota, the site where the project is located. This shall result in use of NG for
transportation sector, as industrial fuel and substitute domestic cooking gas. This shall thus
contribute to use of cleaner fuel within the city of Kota and also spur the economic activity in
this area.

Thus it is ensured that the project activity is in-line with the sustainable development criteria
given by the GOI and has positive contribution towards all the stipulated indicators. The Host
Country Approval of the project has also been received on 3
rd
April 2007. ( Please see Annexure
-6 )

A.3. Project participants:
>>
Name of Party involved
(*)
((host) indicates a host
Party)
Private and/or public entity (ies)
project participants (*) (as
applicable)
Kindly indicate if the Party
involved wishes to be
considered as project
participant (Yes/No)
India (host) Private entity:
Shriram Fertilisers & Chemicals, a
division of DCM Shriram Consolidated
Limited

No

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(*) In accordance with the CDM modalities and procedures, at the time of making the CDM-PDD public
at the stage of validation, a Party involved may or may not have provided its approval. At the time of
requesting registration, the approval by the Party(ies) involved is required.

DCM Shriram Consolidated Ltd. is the project owner. The official contact for the CDM project
activity is DCM Shriram Consolidated Limited.

A.4. Technical description of the project activity:

A.4.1. Location of the project activity:
>>

A.4.1.1. Host Party(ies):
>>
India

A.4.1.2. Region/State/Province etc.:
>>
Rajasthan

A.4.1.3. City/Town/Community etc:
>>
Kota

A.4.1.4. Detail of physical location, including information allowing the unique identification
of this project activity:
>>
The address of the Shriram Fertilisers & Chemicals (SFC) is:

Shriram Fertilisers & Chemicals
DCM Shriram Consolidated Limited
Shriram Nagar,
Kota, Rajasthan
India-324004
Website: www.dscl.com

Project is proposed at existing site at Shriram Fertilizers & Chemicals within plant area of 791
acres and is located at Kota in Rajasthan. Kota is located at 257 m from mean sea level (MSL)
and at latitude of 25
o
8' (N) and longitude of 75
o
54' (E).

Kota is located at a distance of 472 km from New Delhi and 900 Km from Mumbai on the New
Delhi - Mumbai broad gauge railway route. It is located at 235 km from Jaipur on National
Highway No 12 from Jaipur to Jabalpur and is a distance of 950 km from Kandla Sea Port.
( Please see next pagre for the map)

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F


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A.4.2. Category (ies) of project activity:
>>
The project activity corresponds to Sectoral Scope 5, Chemical Industry of the UNFCCC
Sectoral scope list for project activities.

A.4.3. Technology to be employed by the project activity:
>>

The Feed Switchover activity at SFC Kota plant involves major modification in Reforming
section, Feed treatment section of the plant and also in the instrumentation system of the plant.
The technology for these modifications has been provided by M/s Haldor Topsoe A/s, Denmark
who is the world leader in Reforming technology and also the original designers of the plant in
1969. M/s HTAS were awarded the contract to provide the license to transfer and to use their
proprietary technology for steam reforming for feedstock changeover project. They also supplied
the proprietary catalysts for use within Primary Reformer and also provided Basic Engineering
Package and the Detailed Engineering package for the project. The project was commissioned
under their supervision as well.

L&T Chiyoda Limited (LTC) was awarded the contract for doing the detailed engineering for the
project. LTC is a consultancy joint venture between Ms/ L&T, a leading Indian engineering firm
and M/s Chiyoda, leading international engineering company based in Japan.

As the project involves substitution in raw material only, the changes were limited to upstream
equipment of the front end only and no changes were done Synthesis section or in Urea Plant.
The process flow diagram for both Naphtha as feed (pre project activity) and NG as feed (post
project activity) is attached herewith as Annexure 7. The description of modifications / additions
carried out in the plant to enable use of Natural Gas is summarised as under:

Natural Gas shall be supplied through an 8 dia pipeline from GAILs (Gas Authority of India
Ltd, the gas supplier) metering station up to the battery limit of SGC plant. Part of gas is used for
making Ammonia ( called Feed NG) and is heated up to 380
0
C using newly installed direct fired,
NG Preheater. NG preheater comprises of radiant section, convection section and is heated by
burning fuel NG. The heated Process NG at 380
o
C is then passed through Cobalt Molybdenum
catalyst in existing Hydrogenator reactor where sulphur in gas gets converted into Hydrogen
Sulphide. This Hydrogen Sulphide is then catalytically separated from NG in existing Zinc Oxide
reactor for final sulphur removal. The gas from Zinc Oxide reactor is mixed with steam and sent
to new Steam Naphtha coil where it is heated upto 520
o
C in Convection section of the Primary
Reformer. The gas is then fed to two new inlet headers of Primary Reformers. From the Inlet
header, it is distributed to individual Primary Reformer tubes through existing Inlet hairpins and
new Reformer catalyst flange assembly.


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Heat is supplied to Primary Reformer through burners installed in side walls. These primary
reformer burners, which were earlier designed to operate with Naphtha, were replaced with new
side fired burners capable of burning NG as well. In order to heat NG and other surplus,
hydrogen rich fuel stream recycled from downstream equipment, two steam-heated shell and tube
type heat exchangers have been installed. Fuel at about 180 deg C is then fed to Reformer
burners along with hot combustion air.

Burner of another downstream fired heater (Start Up heater) was also replaced as the existing
burner was capable of using only Naphtha. Similarly, two small Mist Separators were also
installed as part of the project to remove any water entrained in gas mixture being fed to NG
Preheater.
The Flue gas, collected from flue gas duct, is sent to new Induced Draft fan from where it goes
into atmosphere through a flue gas stack. In the primary reformer convection section, the existing
BFW coil has been are replaced with new combustion Air pre-heater with associated FD fan.

New piping, ducts and control valves have also been installed to transport gases from various
equipment.

In view of the significant changes in the existing instrumentation control schemes arising out of
NG feedstock conversion, the new control valves, instrumentation and safety interlocks have
been installed. Emergency Shutdown system has been changed to incorporate the new
requirements and integrate with the existing control system.

As part of the project, existing equipment have been modified or replaced only when they could
not meet the new requirement under changed plant operating conditions when gas is in use. All
the equipment installed / modified as part of the project continuously remains in line during
operation and there is not a single stand by equipment installed as part of this project.

Major equipment of Hydro-desulphurisation Section which shall not be in service while Natural
Gas is being used are Crude Naphtha pumps, HDS pumps, Fuel Naphtha Pumps, No1 and No2
Pre-fractionators, Hydrogen Recycle Gas Compressor, HPS preheater, HDS Reactor, various heat
exchangers, Naphtha Tanks etc. It is proposed to keep these equipment as standby for any
emergency use. NDT tests and life assessment of these equipment and the past trends of their
health indicate that the condition of these equipment is satisfactory and can continue to be
operated if required in future. (Chartered Engineers certificate certifying that these equipment
have residual life of 25 years is enclosed as Annexure 7). These equipment have been stopped
only because they are not required while using Natural Gas in the plant and shall be operated in
future if naphtha is processed.


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A.4.4 Estimated amount of emission reductions over the chosen crediting period:
>>
The project activity had chosen the fixed crediting period of 10 years and for the whole crediting
life is aimed to produce cumulative emissions reductions of 70,994 tCO
2
e.(The crediting period
for the project activity starts from 2010 and ends in 2020.)

Year Annual estimation of emission reduction in
tonnes of CO
2
e
2010 70,994
2011 70,994
2012 70,994
2013 70,994
2014 70,994
2015 70,994
2016
70,994
2017 70,994
2018 70,994
2019 70,994
Total estimated reductions (tonnes CO
2
e) 70,994
Total number of crediting years 10
Annual average over the crediting period of
estimated reductions (tonnes of CO
2
e)
709,940

A.4.5. Public funding of the project activity:
>>
The project has received no public funding from parties included in Annex-1 thus avoiding the
possibility of diversion of ODA.

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SECTION B. Application of a baseline and monitoring methodology

B.1. Title and reference of the approved baseline and monitoring methodology applied
to the project activity:
>>
The project activity follows an approved baseline and monitoring methodology titled as
AM0050 Feed switch in integrated Ammonia-urea manufacturing industry Version 2.1,
dated 14 May 2008, which is the revision of proposed methodology NM0165- Feed switchover
from Naphtha to Natural Gas (NG) by Phulpur plant of IFFCO. The methodology has been
approved with some modification by the Executive Board in their 31
st
meeting in Bonn,
Germany.
.
Additionality is to be determined by using the Combined tool to identify the baseline
scenario and demonstrate additionality, version 02.1 15 December 2006.

B.2.Justification of the choice of the methodology and why it is applicable to the project
activity:
>>

The project activity meets all the conditions applicable to feed switch project activities in
existing integrated Ammonia-Urea Manufacturing facilities where feed switchover is taking
place from feedstock having higher Carbon to Hydrogen Ratio (CHR) such as Naphtha and Fuel
oil, to feedstock having lower CHR (e.g. Natural Gas).

The point wise information regarding the applicability conditions of AM0050 Feed switch in
integrated Ammonia-urea manufacturing industry Version 2.1,14 May 2008 are as under:

Integrated ammonia urea manufacturing industries that involve partial or total
switching from naphtha to natural gas, as feed stock with a lower carbon to hydrogen
ratio (CHR) than that indicated in the baseline

The project activity shall be carried out in integrated Ammonia Urea manufacturing unit of
Shriram Fertilisers & Chemicals, Kota in which entire Ammonia is converted into Urea.
Project involves the total switching from Naphtha to Natural Gas. Naphtha is being used as
feedstock in the base line and has carbon to hydrogen ratio (CHR) of 5.45. It is proposed to
modify the existing plant to switch the feedstock to Natural gas which has the CHR of 3.011
ie lower than that of Naphtha in baseline. The detailed calculation of CHR Ratio for both
Naptha and NG is attached as Annexure 2. The provision for using naphtha shall be retained
for use in case of supply disruptions / emergencies. Naphtha consumption, if any, shall be
monitored and emission reduction shall be monitored accordingly.


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Integrated ammonia Urea manufacturing plants that are not constrained by local
regulations and/or programs from using naphtha as feed, neither obliged to use natural
gas (NG) and/or liquefied natural gas (LNG) as feed

As per the local regulatory compliance requirements, there is no need to switch from
Naphtha to Natural gas, and this project activity is not the result of meeting any regulatory
norms. The SFC plant is free to choose any feed stock and this decision is not governed by
any mandatory regulation of local government.

Project activities that do not result in the increase of the production capacity

The production capacity of SFCs Urea plant were assessed and fixed by Govt of India in
1.4.2000 at 379,000 MT / year (Please see Annexure -1 of the enclosed Annexure 8). The pre
and post project shall continue to remain same ie 379,000 Mt / yr. The project activity
involves modification in only one section of the plant and no additional equipment has been
installed in other sections of Ammonia plant and in any section of the Urea plant. The
production capacity of the other sections in Ammonia Plant and of Urea plant essentially
remains same. This is corroborated by the production plan received from government of
India indicating that production capacity during 2003-04 (before project conceptualisation),
2006-07 (during project implementation) and 2008-09 (after project implementation)
remains same at 379,000 MT of urea (See Annexure 9 for production targets of these years
given by Govt. of India)

This is corroborated by the copy of data for 2004 05, 05-06, 06-07 and 07-08 given to
Fertiliser Industry Coordination Committee (FICC, a Govt. of India body responsible for
Fertiliser subsidy disbursals), enclosed as Annexure -10. This is further corroborated by copy
of Schedules to Accounts section of Annual Report of the company for above years
indicating actual production. (Please see Annexure -11).

Natural gas is sufficiently available in the region or country, e.g future natural gas based
capacity, additions comparable in size to the project activity, are not constrained by the
use of natural gas in the project activity

The supply of NG in India is not constrained and is available for Fertiliser plants. The
demand is partly being met by gas supplies from Bombay High and from Gulf of Cambay
(called PMT Gas). It is also being procured as LNG through a mix of long term contracts and
spot gas purchases from international markets. Gas is mainly coming from Middle East
which has the largest gas reserves in the world. Also, large indigenous gas fields are being
developed to ensure that Natural gas is available to Urea plants in India in future. M/s
Reliance Industries has discovered huge gas reserves in KG D6 field in off shore of Krishna-
Godavari river basin, Bay of Bengal in 2003 and its pipeline for with and is laying pipeline to
supply about 40 MMSCMD of gas to Indian customers. This indigenous gas is available to
customers from Mar 2009 on a continuous basis. This is expected to increase the gas supply
in country from 125 MMSCMD to 165 MMSCMD thus leading to increased availability.
Gas supply from KG basin shall be ramped upto 80 MMSCMD in subsequent two years.

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SFC requirement of natural gas is 0.65 MMSCMD which is relatively very small in
comparison.

M/s Petronet LNG Ltd, India have also expanded their plant at Dahej by increasing its
capacity from 7.5 Mil MT / yr to 10 Mil. MT/Yr, thereby supplying additional 10
MMSCMD. This has been completed in 2009. LNG Terminal of 5 Million MT ( 20
MMSCMD) capacity in Kochi is also expected to be commissioned by 2012. In future,
additional gas may also be available in India through Iran-Pakistan-India pipeline under
discussion Thus indigenous and imported gas availability is expected drastically to increase
in future fulfil the demand. (Extract from AT Kearney presentation of gas sector, Oct 2008
enclosed as Annexure -12).

Govt. of India has laid down guidelines for gas allocation explicitly stating that gas should be
allocated to the existing fertiliser plants on priority basis. Top management of GAIL (Gas
Authority of India Ltd., our natural gas supplier and Indian Govt undertaking which is also
largest gas transporter in India) has assured that SFC shall be supplied with Reliance gas.
The gas supplies have been started in Sep 2007 and from May 2009, plant has been using
100% natural gas.

Thus, with theexpected growth of gas supply in India, availability of NG is not expected to
be a constraint for SFC or for any other gas user in India.

Integrated ammonia urea manufacturing plants in which the carbon in the naphtha
feed used prior to the implementation of the project activity is in excess of that needed in
the urea production process. The excess carbon in the feed is emitted as CO
2
to the
atmosphere

The project activity is being implemented in integrated Ammonia Urea manufacturing plant
which was using Naphtha as feedstock in baseline. Due to high CHR of Naphtha, CO2
generation was in excess of the requirement. The excess CO2 was being emitted to
atmosphere. The project aims to reduce the excess CO
2
emissions by changing Naphtha
feedstock (with the higher C/H ratio of 5.45) to NG (with lower C/H ratio of 3.01 as
explained in Annexure 2). The detailed carbon balance (attached as Annexure 13) indicates
that excess CO2 being vented earlier with Naphtha gets eliminated when operating on
Natural Gas.

The Integrated ammonia urea manufacturing plant is an existing plant with a historical
operation of at least 3 years prior to the implementation of the project activity

SFC Kota was commissioned in 1969 and expanded in 1974 (Copy of Govt. license dated
1974 attached as Annexure 14).The facility has successful operational history of 35 years
before implementation of project activity. The extract of companys Annual Report giving
production details for last three years is attached as Annexure 11.


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Project activities that do not result in changes in the production process (e.g as a result of
product change) other than the feed switch

The project activity is intended only to switch the feed for the production of Urea and
ammonia. The process of Urea production remains same, the input for Urea plant remains
same ie Ammonia and Carbon Dioxide. Perusal of the production data from companys
annual report (Annexure-11) indicates no new / additional product capable of being produced
in integrated Ammonia Urea plant has been added during last 3 years.

If the use of natural gas in project activity results in a situation where the natural gas
does not have sufficient carbon to meet the requirement of urea production, then the
balance CO
2
required for use in urea production is:
a) Either recovered with the use of a Carbon Dioxide Recovery Plant (CDR) from
CO
2
in flue gases emitted from an existing source of fossil fuel combustion for
energy purposes within the project boundary. The CO
2
in the flue gases would
have been emitted into the atmosphere in the absence of the project activity;
or
b) generated by using adequate quantities of natural gas for the production of
required amount of CO
2
needed for Urea production. The CO
2
emissions
occurring from the use of natural gas feed stock for the Urea production should
be lower than the CO
2
emissions from Naphtha feed stock for same Urea
production

The project activity ensures sufficient carbon availability to meet requirement of Urea plant
when using natural gas as feedstock by using adequate quantities of natural gas. During the
design engineering for the project, process designers, M/s Haldor Topsoe, Denmark,
calculated that the equipment are capable of processing more natural gas than that required
for ammonia. This results in generation of the sufficient carbon dioxide required for
production of Urea. The excess hydrogen generated through this method is recycled back to
the Primary Reformer and is used as fuel in place of natural gas. Also, heat requirement of
primary reformer which was earlier being met by carbon rich fuel is now partly being met by
hydrogen rich fuel thereby reducing CO2 from the flue gases. Thus carbon emissions in
project case become lower than the baseline case. This method is a widely used method for
converting from Naphtha to natural gas and avoids using costly equipment for recovery of
Carbon Dioxide from flue gas and is recommended by our process licensor M/s Haldor
Topsoe, Denmark plant retrofits (See Annexure 15).

As may be seen from Carbon Balance (Annexure 13) and from the CER calculations, the
carbon emissions from baseline case are higher compared to project case thus meeting the
above conditions.


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The source of thermal energy for processing the feed is the combustion of fossil fuels in
boilers both in the baseline scenario as well as in the project activity

The thermal energy in form of steam and electricity is generated from coal based power plant
in baseline case. In the project case, this shall continue. The project activity only aims to
switch over to the feedstock for carbon and hydrogen and no modifications / additions have
been done in utility side.

Prior to the implementation of the project activity, no natural gas has been used in the
integrated ammonia urea manufacturing plant,

There were not any use of NG before the implementation of project activity in this Ammonia
/ Urea integrated plant. The natural gas supplies started to the Fertiliser plant in Sept 2007.
The correspondence between M/s SFC, BPCL (the gas suppliers) and GAIL (gas
transporters) indicating the date of commissioning of gas metering station skid and the start
of gas supplies is attached as Annexure 16. The perusal of raw material consumption
statement in last three years Annual Reports is attached as Annexure 11.

The quantity of steam and electricity required for the ammonia production process is
either not affected with the use of naphtha and natural gas i.e. it is the same with the use
of naphtha and natural gas or is lower in case of Natural Gas when compared to
Naphtha.

The project involves replacement of feedstock of the Ammonia Plant from Naphtha to
Natural Gas. Such major changes in plant result in variation in utility consumption. In case of
SFC, the feedstock conversion has resulted in lowering of steam and electricity consumption
per ton of Ammonia produced. This is evident from the graphs and the monthly data from
2004 onwards enclosed in Annexure 17. The monthly average 36 Kg/cm2g Steam
consumption has reduced from 0.485 Ton / Ton Ammonia ( avg for period Apr 2004 Aug
2007, 100% Naphtha period) to 0.0382 Ton / Ton Ammonia ( May 09 Jan 10). Similarly,
power has reduced from 910 kWh / Ton Ammonia ( avg for period Apr 2004 Aug 2007,
100% Naphtha period) to 855 kWh / Ton Ammonia ( May 09 Jan 10). From this, we may
observe that both 36 Kg/cm2g steam consumption and power consumption has reduced after
changeover to NG. The above reduction in utility consumption has resulted in reduction of
CO2 emissions but same has not been considered in the CER calculations for the project,
making them more conservative.

B.3. Description of the sources and gases included in the project boundary

The definition of project boundary states that the project boundary shall encompass all
anthropogenic emissions by sources of GHGs under control of project participant that are

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significant and reasonably attributable to the CDM project activity. The project boundary for this
CDM activity shall encompass all the sections of the Ammonia-Urea manufacturing process.

The methodology does not take into account the emission arising from the use of fuel in the
utility boilers and the electrical energy generation since the steam and electrical energy
requirement would be the same or lower for the same production output. The associated
emissions would also essentially be the same or lower in the project activity as compared to the
baseline emissions. Thus for simplification, emissions arising from these activities have been
excluded from the project boundary. The other emissions (CH
4
, N
2
O) remain the same or lower
in the project boundary so they are excluded from baseline and project activity.

As the Primary Reformer of the plant has sufficient capacity and can supply the adequate CO2
for conversion to Ammonia, CDR plant is not required and therefore not included in project
boundary.

Leakage in the project activity due to Methane emissions from Natural gas production and the
emissions in pipeline during the transport and distribution is also considered.

Emissions sources included in or excluded from the project boundary:

Source Gas Included? Justification

B
a
s
e
l
i
n
e

Processing of
feed

CO
2

Yes
Main emission source. CO
2
is
produced in the reforming of the
feed and is partially recovered for
use in the production of urea. CO
2
in excess of required amount is
released to the atmosphere

CH
4

No
Negligible fugitive CH
4
emissions
may occur during the processing of
the feed and products. These
emissions (if any) would be
essentially the same as in the
project activity. Therefore, they are
excluded for simplification
N
2
O No Not applicable.

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Fuel used in
furnaces

CO
2

Yes
Main emission source are flue gases
due to the combustion of fossil fuel
to provide thermal energy for feed
treatment (sulphur removal in
Hydro desulphurisation pre-heater
and primary desulphurization unit)
and the syn-gas production
(Reforming).
CH
4
No These emissions (if any) would be
N
2
O No These emissions (if any) would be

Fuel used for
Steam
Requirement

CO
2

No
Utility requirements are expected to
remain same as in project case as
production remains same. The
related emissions from utility
production shall remain same or be
higher compared to the project
scenario. Thus these have been
excluded for simplification and for
being conservative

CH
4

No
These emissions ( if any) are
expected to be the same or higher
as compared to the project scenario.
Thus these have been excluded for
simplification and for being
conservative
N
2
O No These emissions (if any) are
conservative

Electricity
Requirement

CO
2

No
These emissions (if any) are
conservative

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CH
4

No
These emissions (if any) are
conservative
N
2
O No These emissions (if any) are
conservative
Source Gas Included? Justification
P
r
o
j
e
c
t

A
c
t
i
v
i
t
y

Processing of
feed

CO
2

Yes
Main emission source. CO2 is
produced in the reforming of the
feed and is recovered for use in the
production of urea.

CH
4

No
Negligible fugitive CH
4
emissions
the feed. These emissions (if any)
would be essentially the same as in
the baseline activity. Therefore,
they are excluded for
simplification.
N
2
O No Not applicable.

Fuel used in
furnaces

CO
2

Yes
Main emission source due to the
combustion of fossil fuels. The
project activity will result in lower
thermal energy required, as sulphur
is negligible in NG/LNG.
CH
4
No Negligible fugitive CH
4
emissions
the feed. These emissions (if any)
would be essentially the same as in
the baseline activity. Therefore,
they are excluded for
simplification.
N
2
O No Excluded for simplification, this is
conservative.

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Fuel used for
Steam
Requirement

CO
2

No
These emissions are expected to be
the same or lower as compared to
the baseline scenario. Excluded for
conservative.

CH
4

No
the same or lower as compared to
the baseline scenario. Excluded for
conservative.
N
2
O No These emissions are expected to be
same or lower as compared to the
baseline scenario. Excluded for
conservative.

Electricity
Requirement

CO
2

No
conservative.

CH
4

No
conservative.
N
2
O No These emissions are expected to be
conservative.
Energy
Consumed by
CDR plant
CO
2
No No energy is consumed as CDR is
not required and hence not installed
CH
4
No No energy is consumed as CDR is
N
2
O No No energy is consumed as CDR is

The project boundary can be depicted as following:


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Feed
Feed treatment
( Sulphur removal )
Syn - gas production
( Reforming )
Syn - gas purification
Synthesis loop
Ammonia
Urea production
Urea
Thermal energy
Air
Steam
Electrical energy
Excess CO2 let
out to atmosphere
CO2
Flue gas
Project Boundary
Flue gases
Excess
Hydrogen Rich Gas

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B.4. Description of how the baseline scenario is identified and description of the
identified baseline scenario:
>>
The Baseline Scenario has been identified using the Combined tool to identify the baseline
scenario and demonstrate additionality, version 02.2 26
th
Aug 2008 developed by the
Methodology Panel and approved by the CDM Executive Board in its 28
th
meeting. The same
tool is also used for demonstrating the additionality of the project. The choice of tool is as per the
approved methodology AM 0050 being followed for the project.

As per AM 0050 Methodology, the following steps have been used for the above purpose:

1. Identification of alternative scenarios.
a. Sub-Step a : Identifying alternative scenarios to the proposed project activity
b. Sub-Step b : Ensuring consistency with mandatory applicable laws and
regulations
2. Investment Analysis using Step 3 of Combined tool to identify the baseline scenario
and demonstrate additionality, version 02.2 26
th
Aug 2008
3. Barrier Analysis ( Although not required as per AM 0050, however, still carried out for
better understanding)
a. Sub-step a : Technical Barriers
b. Sub0step b : Lack of prevailing practice
4. Common Practice Analysis

The various alternative scenarios to the CDM project activity have been identified

Alternative 1: The continuation of current practice, i.e. usage of naphtha alone as feedstock for
the production of urea, resulting in CO
2
surpluses that are released to the atmosphere.

Alternative 2: Partial substitution of naphtha with NG/LNG so as to reduce the CO
2
surpluses
released to atmosphere for similar output of urea.

Alternative 3: Complete switchover from Naphtha to NG/LNG resulting in the reduction of
CO
2
surpluses and equivalent emissions for similar output of urea.

Alternative 4: Usage of naphtha as feed and production of CO2 surpluses, but with capture of
the CO
2
surpluses, which would otherwise be released to the atmosphere, for its use in
manufacture of other applications or products.

Alternative 1 - Continuation of current practice, i.e. usage of naphtha alone as feed for the
production of urea, resulting in CO
2
surpluses that are released to the atmosphere has been
taken as the most plausible baseline scenario. Kindly refer subsequent section B.5 for the

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detailed procedure for arriving at the attractiveness of the Alternative 1 over the other
alternatives.

B.5. Description of how the anthropogenic emissions of GHG by sources are reduced
below those that would have occurred in the absence of the registered CDM project activity
(assessment and demonstration of additionality):
>>

The methodology requires project proponent to test additionality on the basis of Combined tool
to identify the baseline scenario and demonstrate additionality, version 02.2 26
th
Aug 2008
developed by the Methodology Panel and approved by the CDM Executive Board in its 28
th

meeting. The following

Step 1: Identification of alternatives to the project activities:

Step 1(a) : Define alternative scenarios to the proposed CDM activity

The various alternatives to the CDM project activity, identified are as under:

Alternative 1: The continuation of current practice, i.e. usage of naphtha alone as feedstock for
the production of urea, resulting in CO
2
surpluses that are released to the atmosphere.

This alternative practice is presently being followed at SFC Kota. No modifications and
consequently, no investments would be required to continue the use of naphtha. Hence no
reduction in CO
2
emissions or energy savings is possible.

Alternative 2: Partial substitution of naphtha with NG/LNG so as to reduce the CO2 surpluses

SFC Kota can partially switchover to NG feed and thereby reduce surplus CO
2
emissions to the
atmosphere while maintaining the same Urea production. However, CO
2
emission shall partly
continue as in Alternative-1. Also, significant modifications and addition of new equipment
would anyway be required in the plant for using Natural Gas / LNG in place of naphtha for
which the plant is originally designed for. This alternative will therefore require significant
investment similar to that required for full NG / LNG conversion while the reduction in CO2
emissions will not be high.

Alternative 3: Complete switchover from Naphtha to NG/LNG resulting in the reduction of CO
2

surpluses and equivalent emissions for similar output of urea.

This alternative could eliminate the emission of surplus CO2 and also reduce CO2 emission from
flue gases. This would require significant modifications and addition of new equipment in the
plant as the plant is originally designed for processing naphtha feedstock. Thus significant
investment shall be required for this alternative.

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Alternative 4: Usage of naphtha as feed and production of CO2 surpluses, but with capture of
the CO
2
surpluses, which would otherwise be released to the atmosphere, for its use in
manufacture of other applications or products.

Alternative 4 cannot be a probable baseline scenario as this is not a general industry practice.
Surplus CO
2
contains traces of Potassium Carbonate, Di Ethanol Amine, Vanadium Pentoxide
which are hazardous and cannot be used for general industrial manufacturing. There are no
facilities within the company where the surplus CO2 can be used and no product is being
manufactured by company which can use surplus CO
2
for its manufacture other than Urea (please
see Annexure 11 giving the list of products from Annual Report of the company ). This indicates
that CO
2
surplus cannot be used in any other application within the plant. Hence Alternative 4
has been excluded from further analysis.

Step 1(b): Consistency with mandatory law and regulations

Alternative -1 is the continuation of the current practice and is fully consistent with mandatory
laws and regulations. Similarly, all the above mentioned alternatives are in compliance with all
legal and regulatory requirements of India and do not contravene any law of the land.


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Step 2: Investment Analysis

Investment Analysis has been carried out for following alternatives as under:

Alternative 1: The continuation of current practice

As the above case represents the continuation of the current practice, there shall be no investment
for this case. Also there shall be no reduction in CO2 emissions and no energy savings which
arise on account of change in the feedstock form Naphtha to LNG; hence there shall be no
savings. Thus IRR for this Alternative shall be zero.

Alternative 2 & Alternative 3:

The assumptions made for investment analysis for Alternative 2 & 3 are as under:

1. Annual production of urea has been taken as 379,000 MT / Yr. This has been based on the
capacity assessed and fixed by the Government of India (Kindly refer Annexure -1 of
Annexure 8). This has been assumed constant as no changes are being made in any other
section of Ammonia Plant and in urea Plant which can lead to increase in capacity.

2. Existing Energy Consumption of the Urea plant ( in terms of Mkcal/ MT urea) has been
taken as 7.847 Mkcal / MT. This is as per the energy fixed by Government of India from
their evaluation of the plant energy consumption data and based on which the subsidy
payments for Urea productions are calculated. (Please see http://www.fert.nic.in/docs/Pre-
set_energy_norms.doc for the policy, enclosed as Annexure -17).

3. Energy saving arising out of feedstock conversion has been considered as 0.027 Mkcal / MT
Urea. This is based on the comparison of the energy consumption of the Process Flow
Diagrams in the base case with naphtha feedstock and in case with natural gas feedstock,
prepared by M/s Haldor Topsoe Denmark, during the design engineering work of the project.
The comparison, is enclosed as Annexure 18)

4. The benefit of cost differential between naphtha and NG feedstock has been excluded from
IRR analysis due to the prevailing policy of Government of India regarding the calculation of
subsidy payment and the energy saving in the Indian Urea plants. The relevant features of
the Fertilizer Policy are the following:

In order to provide urea to the farmers at an affordable price and promote agricultural
growth, the Government of India (GOI) calculates production cost of urea (including raw
materials and fuel cost) for urea plants based on the Group Concession Scheme (GCS).
Group Concession Scheme (GCS) was introduced from 1
st
April, 2003 vide circular dated
30
th
January, 2003 replacing erstwhile Retention Pricing Scheme. Under GCS, the fertilizer
plants are grouped according to type of feed/fuel used, technology and vintage. The subsidy
is reimbursed to plant according to feed used, technology and vintage. ( Source :
http://www.fert.nic.in/pricepolicyurea.asp ,)

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Under GCS the production cost of Urea is termed as concession rate. In order to provide
Urea to the farmers at affordable price, GOI has fixed the sales price of Urea and all urea
manufacturers have to sell Urea at this notified price. The difference between the actual
production cost of Urea (concession rate) and notified sales price of Urea is reimbursed by
government as fertiliser subsidy. This subsidy is determined ex-post based on cost data
submitted by the urea plant, and is subject to pre-defined auditing and calculation procedures
by Government of India.

The concession rate of Urea for a plant is fixed based on vintage and type of feed/fuel used,
as per the GOI Circular No. FICC/CE/22/2003/164 dated 28
th
May, 2003. The energy cost
component of Concession rate for making urea is calculated as product of the cost of energy
used and energy consumption / MT urea. The energy cost component of the concession rate
for natural gas feedstock is lower than the naphtha due to the lower price of natural gas as
compared to naphtha, while the energy consumption remains almost same in case of
feedstock conversion. Thus, in case of NG feed, the Concession rate received from
Government by the manufacturer reduces to the extent of new energy price based on NG and
the benefit of reduction of energy price from naphtha to NG is not available to manufacturer.

Any reduction in concession rate of urea would thus be reducing the subsidy outgo of
Government of India only. SFC is not getting any benefits due to the differential cost of
Naphtha and Natural Gas. Hence in investment analysis the differential cost of Naphtha and
Natural Gas is not considered.

The actual cost of inputs which is submitted to GOI is certified statement of third party
financial auditor. GOI reviews the submitted statement of actual cost of inputs and
accordingly fixes the revised concession price of Urea. GOI submits documents to SFC
confirming the revision of concession rates based on escalation/de-escalation statements
submitted by SFC.

5. Operating costs for each feed .

Under the GCS Policy, in case the actual energy consumption of the plant is lower than the
normative energy consumption fixed by the government ( 7.847 Mkcal / MT in case of SFC
Kota, see Annexure 17), the benefit of energy saving between the norm and actual
consumption shall be passed on to manufacturer as incentive for energy efficient operation.
This benefit due to energy efficiency was reimbursed to the fertilizer plant based on the basic
cost (purchase cost excluding tax, levy, transportation etc) of the cheapest fuel used in the
plant. For example, if a plant conserves energy and saves naphtha fuel, reimbursement of
energy cost benefit would be based on basic cost of the cheapest fuel used in the plant (say
coal). So the reimbursement was not based on naphtha fuel, but based on coal fuel cost.
Hence, in case of SFCs Feed switch project, the cost savings due to avoidance of energy
required for Naphtha handling is calculated based on lowest cost fuel used in SFC Kota i.e.
coal. This is taken as Rs 1442 / MT (basic cost of coal excl Royalty, cess, taxes etc, incurred

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in 2004 05) with wt. average calorific value of 4298 kcal / kg (See Annexure 19 for
verified copy of the statement submitted to Govt. of India substantiating the same)

(Reference: Policy on Energy norms, raw material mix and mechanism for providing
escalation/de-escalation in prices of inputs for urea units during Stage-II of the New Pricing
Scheme, Source: http://fert.nic.in/docs/Pre-set_energy_norms.doc ).

Further, the operational efficiency including energy efficiency arising due to conversion to
NG/LNG will not be mopped by the Govt. for a period on the basis of energy efficiency and
financial returns subject to a maximum of five years as per the GOI Circular No.
12019/11/2003-PP (3) dated January 29
th
, 2004. regarding treatment existing non-gas based
urea units converting NLNG feedstockfuel.doc.
(http://www.fert.nic.in/docs/Policy_treatment_existing_non-
gas_based_urea_units_converting_NGLNG_feedstockfuel.doc)

Thus the benefit on account of energy saving due to feedstock conversion has been taken into
account only for five years in the IRR calculations.

6. Lifetime of the project has been considered at 20 years, while the benefit from CDM
revenue has been taken for 10 years only.

7. Depreciation rate has been considered as 25% as applicable for Plant and Machinery under
Income Tax Act of India for year 2004-05

8. Salvage value of the equipment has been considered as 10% of the total investment at the
end of 20 years lifetime as per the accounting practices followed in India

9. Income Tax rate has been taken as 35.875% as per Income Tax Act of India

10. The financial indicator chosen is the internal rate of return of the project (IRR)
1
. This has
been compared with the cost of financing which has been taken from the Prime Lending
Rate (PLR) in India (the rate at which banks are willing to lend at) which is conservatively
estimated at 10.5%. PLRs are available in Reserve bank of India ( Indias Central bank)
online data base ( www.rbi.org.in) and during the period from Sep 04 till Mar 05 were in
range from 10.25 ~ 10.75. Please annexure 20 for the data.

11. The investment for the project has been taken as Rs 360 Million. The broad break-up of the
investment is as under.

DO


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S.No Item Value ( Rs / Million)

1 FD Fan Assembly 16.24
2 ID Fan Assembly 17.82
3 NG Preheater 81.06
4 Steam Air Preheater 4.72
5 Primary and Secondary Fuel Gas Heaters 30.20
6 Steam NG Coil 49.40
7 Structure, Ducting & Accessories 45.11
8 Reformer Burner & Accessories 39.37
9 Start- Up Burner 0.82
10 Primary Reformer Catalyst 4.59
11 Hydrogen Drain Separator 0.19
12 Instrument & Control Valves 8.08
13 Combustion Air Preheater 20.8
14 Flue Gas Stack 12.58
15 Transformer 2.39
16 DCS 27.48
17 Computer 0.21
Total 360.87

For partial conversion ie 50% reduction in CERs by 50% reduction in NG, it has been
estimated to be Rs 240 Million, using 6/10 rule for equipment cost estimation (a standard
chemical engineering rule described in Annexure 21).

12. Annual increase in the cost of coal has been considered as 12% based on the CAGR for
previous 3 years ie 2001-02, 2002-03, 2003-04. ( Se Annexure - 22) Higher inflation rate
shall lead to higher future coal costs projections which leads to higher energy savings for
the project. Thus, higher inflation rate is more conservative in case of evaluating IRR
without CDM benefits.

13. Maintenance charges have been considered as Rs 0.5 Million / year for full conversion,
estimated based on the experience of the plant personnel with the new equipment installed.
Break up enclosed as Annexure 22. For partial conversion, it has been reduced in
proportion to the investment and considered as Rs 0.33 Million corresponding to investment
of Rs 240 Million.

14. The exchange rate has been considered as Rs 56.55 / Euro (Average for 2004-05, source
Reserve Bank of India website). Sale price of CER has been considered as Euro 13 / CER
(average of Euro 10 ~ 15 / T CO2 price expected in future). The IRR analysis has been
checked for +/- 10% sensitivity analysis to CER price and exchange rates to identify the
impact of the changes.


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15. Only 90.5% of CDM revenue has been considered for the project balance 7.5% has been
taken as fees for the consultant and 2% for the adaptation fees. Issue fees of 13,420 Euros
have been considered.

Discussion on results of Investment Analysis:

Based on above assumptions, IRR has been calculated for partial conversion to RLNG / NG and
for full conversion to RLNG/NG. This has been based on the capital expenditure associated with
the project, revenues due to energy saving and the sale of CERs and is attached as Annexure -23
and Annexure -24.

From the calculations, it can be seen that the IRR for the various alternatives is as under:

IRR without CDM
Benefit)
IRR with CDM Benefit
Alternative -1 ie Continuation of
current practice
0 0
Alternative -2 ie partial
changeover of NG /R-LNG
-7.7 7.2
Alternative -3 ie full changeover
of NG /R-LNG
-7.6 12.4

The alternative scenario 1 ie continuation of current practice does not call for any of the
investment as the plant shall continue to operate as in current condition. Alternative -2 and
Alternative -3 require investment to incorporate the proposed modifications but as the savings
are not proportionate, they shall not be gainfully used and shall give negative return, resulting in
uneconomical deployment of capital. Thus, it may be observed that Alternative 1 is the
financially most attractive scenario. Under these conditions, operation of plant as per the existing
practice represents the only logical and feasible mode of operation and is thus chosen as Base
Case scenario for this project.

From the above table, it may be observed that the internal rate of return for Alternate -2 and
Alternate -3 is around 7.7% to -7.6% which makes these projects unviable. However, when the
returns from CDM activity are included in the cash flows, IRR rises to 12.4% for full conversion
case while it remains 7.2% for partial conversion. This demonstrates that the projects are heavily
dependent on CDM revenues for their sustained feasibility, without which they are unviable and
may not have been implemented at all.

Evaluation of Alternative -2 and Alternative -3 indicate that IRR for Alternative -3 is higher than
the benchmark IRR ( 10.5%) chosen above. Thus Alternative -3 ie complete conversion is the
only feasible alternative while Alternative -2 ( ie Partial conversion) is not economically feasible
due to its IRR at 7.2% being significantly lower than the benchmark IRR of 10.5%. This is due to

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the incremental capital investment from partial to complete conversion being lower while the
benefits from full conversion being proportionately higher.

To summarise the above, we conclude as under:

1. The Alternative -1 ie the continuation of existing practice is the financially most viable
alternative (while excluding CDM revenue).

2. Both Alternative -2 and Alternative-3, ie partial and full conversion are unviable projects
with negative IRR of -7.7% and -7.6% respectively and do not qualify for
implementation on their own.

3. IRR of Alternative -3 improves to 12.4% and the project becomes viable only when
CDM benefits are included in project cash flows.

In order to confirm the above finding and identify the impact of the 5 critical parameters on the
economics of project activity, the Sensitivity analysis has been carried out and the results are as
under:

1. Change in CER price + 10%
2. Change in Euro to Rupee exchange rate + 10%
3. Change in investment by + 10%
4. Change in energy saving by + 10%
5. Change in coal price by + 10%

IRR Without CDM ( %) With CDM ( %)
- 10% Increase in CER price -7.59 14.30
- 10% Decrease in CER price -7.59 10.43
- 10% Increase in Euro Conversion Rate -7.59 15.13
- 10% Decrease in Euro Conversion Rate -7.59 10.46
- 10% Increase in Investment -7.59 10.56
- 10% Decrease in Investment -7.58 14.57
- 10% Increase in Energy Saving -7.52 12.51
- 10% Decrease in Energy Saving -7.65 12.28
- 10% Increase in Coal cost -7.53 13.46
- 10% Decrease in Coal cost -7.65 12.28

It can seen from the above table that even after the variation of + 10% the IRR value is well
above the benchmark value of 10.5% for all cases. Thus, the project activity under CDM
revenues remains viable under normal business situations.
Step 2: Barrier Analysis

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Sub-Step 2a : Identify barriers that would prevent the implementation of type of the proposed
project activity.

Technology barriers

The factors which contribute to technology barriers for the project are as under:

1. Retrofit of Natural Gas reforming technology in a 35 year old, 1969 vintage Ammonia
plant originally designed for Naphtha steam reforming of much smaller capacity can lead
to substantial loss of production. The factors which can lead to high risk in retrofitting
the new technology are :

Uncertainty in predicting / simulating performance of existing equipment with new
feedstock
Incorrect assessment of the equipment capacity with new NG technology
Problems with retrofitting, installing new equipment within old constrained plant
layout.
Non existent factor of safety / design margins/ margins of error in old plants already
operating beyond their rated capacity etc.

These can cause very significant loss of Urea production due to plant breakdowns while
commissioning of the plant during start up and in the operation.

2. Extensive modifications in the plant and addition of new equipment require plant to be
shut down for extended period for making the desired changes in the plant. Alternately, it
becomes necessary to complete most of the project implementation work (including
welding, cutting, at heights) within plant operating with hazardous substances like
naphtha, hydrogen, ammonia etc. This requires highest standards of work safety and
project implementation controls. Otherwise, a prolonged shutdown for hooking up the
project or any accident during pre shutdown preparatory work can lead to substantial loss
of production and consequent loss of revenue.

3. In order to operate the plant with natural gas, it is necessary to install new emergency
shutdown systems and control systems. These have to be integrated with existing
emergency and control systems. Existing staff, which is trained to operate naphtha based
equipment with existing emergency and control systems need to be trained thoroughly
for the new conditions. Any mis-operation can lead to very significant loss of production
as well as unsafe operating conditions.

4. There are only two reliable technology suppliers for Ammonia Plant in world, ie M/s
Haldor Topsoe, Denmark and M/s KBR, USA. They hold proprietary technology, patents
for this design of Ammonia plants. SFC Kota is heavily dependent on the technology
supplier for smooth running of the plant and the perceived risk associated with
unfamiliar technology is too high to encourage the project proponent to come up with
such capital intensive project activity.

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Lack of Prevailing Practices

Factors which contribute to the lack of prevailing practices are as under:

1. Of the 31 Urea plants installed in India, 11 Urea plants are of vintage and technology
similar to SFC Kota and were designed to process Naphtha or Fuel oil as feedstock.
None of these plants had converted from original feedstock to natural gas during the
project conceptualisation and design stages of SFCs Feedstock conversion project. Thus
there were no prevailing practices in India at the time of project conceptualisation and
design

2. Concurrent to the project conceptualisation by SFC Kota, IFFCO Phulpur, Fertiliser plant
in North India had also taken up the project for conversion from naphtha to natural gas.
However, the process steps / equipment of IFFCO Phulpur are very different from SFC
Kota. The shortfall in CO
2
is envisaged to be made up in case of SFC Kota by loading up
the Primary Reformer whereas in case of IFFCO, this is achieved by installation of CO2
Recovery ( CDR) plant. Thus design philosophy adopted for the projects is different
leading to significantly different design approaches and plant equipment.

4. The novel instrumentation and process control systems have been imported and
implemented for the first time in the Fertiliser industry in India. To reduce the costs of
instrumentation, Fieldbus technology was installed in Indian Fertiliser plant for the first
time. The technology and hardware was supplied by M/s Emerson Singapore and India.
To control the steam flow and other process plants which change depending upon the
extent of NG and Naphtha in the feedstock, a control scheme was proposed by the
process licensor, M/s Haldor Topsoe, Denmark. This is the first and only example of
implementation of such instrumentation scheme for measurement and control of S/C
Ratio in Indian Fertiliser Plant.

5. The detailed engineering work was awarded to M/s L&T Chiyoda. The project was first
large scale project for the party in Fertiliser field. Thus a willing risk was undertaken by
the company to work with a fresh partner in the field and further develop technical
capability of domestic design consultant firm.

6. SFC completed the project by undertaking its own project management and procurement
work against LSTK approach generally adopted by the industry. Construction was
carried out by the existing parties selected by SFC, this helped in reducing the overall
costs.

Thus, SFC- Kota is the first Urea plant in the private sector within India which has taken
the initiative to change the feed stock of their existing plant from the original design of
Naptha feedstock to NG/LNG. The approach adopted to make up for the shortfall of CO2
after Conversion to Natural Gas is also unique and being adopted for the first time in

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India. This technology adopted by SFC-Kota is considered as a risky venture and there are no
prevailing practices in India.

Sub Step 2b : Elimination of all the scenarios which are prevented by the identified Barriers

Alternative 1 : The continuation of current practice, i.e. usage of naphtha alone as feed for the
production of urea, resulting in CO2 surpluses that are released to the atmosphere.

This scenario does not face any of the barriers. The plant would have continued to run in a usual
manner and no barrier would have been faced. Thus the scenario cannot be eliminated by the barrier
analysis.

Alternative 2 : Partial substitution of naphtha with NG/LNG so as to reduce the CO2 surpluses

In this scenario the both the Barriers Technological Barriers as well as that of Lack of prevailing
practices would have been faced as this scenario also require the same modifications as that of the
project activity and this activity would also have been the first of its own kind.

Alternative 3: Complete switchover from Naphtha to NG/LNG resulting in the reduction of
CO2 surpluses and equivalent emissions for similar output of urea.

This is the proposed CDM activity and both the barrier identified above will be faced during the
implementation of the project activity

Outcome of Sub Step 2b

Alternative 1 is the only alternative which is not being prevented by all the identified
barriers and it is not the project activity without under taken as CDM activity hence
alternative 1 is the baseline scenario.

Step 4: Common Practice Analysis:

Sub-Step 4a. Analyze other activities similar to the proposed project activity

No Feedswitch project involving conversion of feedstock from Naptha to NG have so far been
registered by UNFCCC EB under the applicable methodology.

There are 31 Urea plants installed in India of which 11 Urea plants are of vintage and technology
similar to SFC Kota and were originally designed to process liquid feedstock like Naphtha or
Fuel oil for Urea production. None of these plants had converted from their original feedstock to
Natural gas prior to the start of the project.


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Concurrent to SFC Kota project, IFFCO Phulpur Urea plant in North India also started the
feedstock conversion project. Both the projects were completed during similar time periods.
Board approvals were given in Sep 2004 for IFFCO while it was given in Nov 2003 for SFC.
While IFFCO Phulpur -I & II were completed in June 2006 and Apr 2006 respectively, SFC Kota
modification was completed in Aug / Sep 2006.

Also, IFFCO Phulpur plants are of different process schemes and technology compared to SFC
Kota.. The design of Primary Reformer is entirely different than SFCs. IFFCO Phulpur -1 is a
Top fired Reformer for which design philosophy is different as compared to side fired design in
case of SFC. Primary Reformer for IFFCO Phulpur II is a side fired design but has Pre Reformer
installed upstream which reduces the load on Primary Reformer and makes it almost similar to a
gas based Reformer.

In case of SFC, we have adopted a different route by which we can use 100% NG or 100%
Naphtha as feed even without Pre Reformer, while using same catalyst. However, additional load
on Primary Reformer arising out of this has been evaluated carefully in consultation with
technology licensor. The impact of additional fuel firing on the tube wall temperatures and
precautions for rectifying the same have been adequately considered in the SFC design.

The approaches for making up the CO2 shortfall are also different for both the projects. As CO2
has been proposed to be recovered from CDR in IFFCO project, no additional NG is to be fired
in case of IFFCO to generate additional CO2 through Reformer. This results in lower heat flux
on Primary Reformer thus resulting in marginally lower load. In case of SFC, the existing
reformer had to be designed to accept additional load. By adding Fuel pre-heating equipment and
reducing steam to carbon ratio, the overall heat load on the furnace, though higher than earlier
has been kept at acceptable levels in SFC. This approach of SFC Kota is technically more
challenging and is being used for the first time in India.

Thus SFC Feedstock Conversion project and IFFCO projects are entirely different in their
project design conceptualization and implementation.

SFC Feedswitch project is thus the second plant to have completed the Feedstock conversion in
India although both the projects viz SFC Kota and IFFCO Phulpur were completed in first half of
Financial year 2006 -07. This is also further corroborated by certificate from M/s Fertiliser
Association of India, which is the non-profit association of all Fertiliser companies in India, to
this effect.( Annexure 5). Also, SFC is the first and only private sector fertiliser plant so far
to undertake feedstock conversion project.

Sub-step 4b. Discuss any similar options that are occurring.

Although the SFC project was conceptualised in 2003 and completed in Sep 2006, and IFFCO
project was also implemented during the same period, there is no other Naphtha of Fuel Oil
based Urea plant in India which has so far converted to Natural Gas except for these two plants.
As mentioned above, these are the only two projects in world which have so far applied for CDM
benefits under the approved methodology.

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As explained above, both the SFC and IFFCO projects have significant technological differences.
Also, SFC is the first and only private sector fertiliser plant so far to undertake feedstock
conversion project.

Hence, considering the above-mentioned aspects, SFC-Kota project should not be considered as
common practice in India. The successful registration of the proposed project activity as CDM
will provide a trigger for replication of similar feedstock conversion from Naptha to NG in other
fertiliser industries in India.

On the basis of the steps mentioned in Combined tool to identify the baseline scenario and
demonstrate additionality, version 02.1 15 December 2006, the project additionality can be
summarised that, in absence of the project activity the SFC management had no option other than
continuation of the existing use of Naphtha as feed instead of Natural Gas for Urea production
and will continue to produce GHG emissions as per Business as Usual scenario.

The CDM revenue which the plant would be getting would help the plant team to take risk on the
technological innovation and experimentation with the new untested technology. It will also help
the plant team to get trained for learning the new technology and operating the new technology
successfully. The CDM benefit alleviate the barriers faced by the plant team

In such case moving towards use of Natural gas in place of Naphtha will have additional
emission reduction and since the project does not violate any ODA funding it is also financially
additional.

CDM Consideration:

From above, it is evident that CDM consideration is essential for the implementation of the
project as it would help in mitigating the various barriers as discussed under:

It shall result in improving the financial viability of the project thus resulting in its
implementation.

The project, being first of its kind in India, is inherently risky due to implementation of the
new technology in an old, 35 year old plant. CDM benefits shall help in overcoming
technical risks associated with the project.

CDM revenues shall encourage SFC, its sister plants manufacturing PVC, caustic Soda /
Chlorine, Carbide, Cement, etc at its Kota complex to come up with other new projects for
mitigating GHGs. This shall be the first CDM project for Kota complex. Thus, it shall also
encourage other chemical plants in the region to identify and propose new GHG projects.


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CDM revenues for this project shall also encourage other Fertiliser plants in India and in
the world to undertake feed switch projects, thus contributing to the improvement of the
environment.

The management of SFC was fully conscious from the stage of initial conceptualisation of the
Feed switch project in 2003 that CDM revenues are absolutely necessary for making the project
viable. In fact the project was undertaken only when the mechanism of CDM became clear. This
is borne by following:

Company has been following developments in Green House Gas emission area much prior
to the start of the project activity. Some of the programmes attended by the executives of
the company are as under :
o National Strategy Study for implementation of CDM in India, organised by TERI
o Climate Technology bazaar, organised by Confederation of Indian Industries (
CII) in partnership of Ministry of Environment & Forest, Govt. of India, & TERI
in Nov 2003.
o State level capacity building workshop on CDM organised by M/s Winrock
International and IGES Japan in Ahmedabad, India in March 2004.

The internal approval note dated 12.10.2003 was circulated by Deputy General Manager (
Fertiliser) to Executive Director of the complex and to Deputy Managing Director of the
company informing the possibility of CDM financing for Feedswitch project ( copy
enclosed as Annexure 25). The note was circulated after getting feedback from meetings
with various CDM consultants and attending workshop on CDM in Indian Industries on
9th Oct.03 in Mumbai, funded by UK and Common Wealth Office. (Copy of receipt of
railway tickets enclosed as Annexure 26 as proof of attendance).

Based on the note, and subsequent discussions between Dy. Managing Director and
Executive Director, it was decided to forward the proposal to the Board for their
forthcoming meeting. The proposal was discussed during the Board meeting on
30.10.2003, during which the CDM benefits of the project and their impact on the project
feasibility was discussed. It was decided to implement taking CDM revenues of the project
into consideration. ( Copy of Board proposal attached as Annexure 27)

Submission of Project Information Note ( PIN) to TERI ( Indian consultancy in energy
sector), M/s Agri-energy UK ( Jan 2004), kFW Carbon Fund ( Dec 2003), Eco-securities (
Dec 2003), PDIL ( premier Indian Fertiliser Industry consultancy firm), Ernst & Young (
January 2005)

Based on the inputs from various parties, M/s Agri-energy and DSCL Energy Services
Company were selected as Project participant and Service provider for Feedswitch project
during May 2006 and agreement signed in July 2006. (Please see Annexure 28).

Thus, based on above, it may be concluded that CDM was seriously considered during the
decision on the implementation of project and subsequent phases of basic and detailed design

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engineering. Once the CDM revenues were assured, the project execution was started in full
swing.

CDM Chronology:

The chronology of the project and the concurrent CDM activities is as under:

26
th
Aug PDD was web hosted on internet. No comments were received from the stakeholders.
Date of event Event
May 2003. Preliminary enquiries were sent to M/s Haldor Topsoe and other consultants for
undertaking project design work.
12
th
Oct 2003 Internal note submitted on approval of strategy for Feedstock switchover taking into
consideration the CDM benefits

30
th
Oct 2003 Approval obtained from Board on for execution of feedstock switchover project
Oct 03 May
04
Project Information Notes ( PIN) sent to various parties like TERI, Agri-energy, kFW
Carbon Fund, Eco-securities, Ernst & Young during the period from Oct 2003 to May
2004 for assessment of the CDM potential of the project
2
nd
July 2004 Design engineering contract for the project signed with M/s Haldor Topsoe, Denmark
for basic and detailed designing of the plant modifications
13
th
Mar 2005 Environmental clearance was received for the project.

June 2005 The design job was completed and the specifications equipment of new equipment
and modifications were available for procurement
1
st
Nov 2005 First order for major capital equipment was issued on for Combustion Air Preheater
equipment to M/s Rizzi, Italy. This has been chosen as Project Start Date. Other
major equipment were ordered subsequently. ( See Annexure 29 )
Jan / Feb
2006.
Civil work started at site

June July
2006.
M/s Agri-energy and DSCL Energy Services were initially selected as Project
Participant for the Feedswitch CDM project. The final agreement was signed on 20
th

July 2006

Sep 2006 The project was mechanically completed
27
th
Oct 2006 Local Stake holder meeting was held at SFC Kota.

3
rd
April 2007 Application for Host Country Approval was submitted to Govt. of India in Oct 2006
and approval obtained in April 2007.
June / July
2007
Enquiries were sent to various DOEs in June 2007, offers were and M/s DNV
selected as DOE for validation vide agreement dated 20
th
July 2007.


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28
th
Sept 07

Thus it may be observed from above, the project proponents have been actively pursuing CDM
process concurrent to the project design, implementation and commissioning. Some of the gaps
in the chronology are due to the impact of the revisions in applicable methodology and the desire
of SFC Kota to meet the latest guidelines of the revised methodology at all times. Further, as the
project was fully dependent on CDM revenues, it was essential to synchronise / schedule various
activities with view of reducing the project risks. Also, in order to maintain the reliability in the
project implementation and ensure coordination with the CDM project, single project team was
working for both the project implementation and CDM process coordination which also resulted
in some gaps in the chronology.

B.6. Emission reductions:

B.6.1. Explanation of methodological choices:
>>
Emission reductions have been calculated as proposed in approved baseline and monitoring
methodology AM0050 Feed switch in integrated Ammonia-Urea manufacturing industry
Version 02.1, 14 May 2008.

The estimation for baseline, project emission and emission reductions for the project activity are
done as follows:

Estimation of Baseline emissions:

The baseline emissions are calculated as follows:

y Heat y Feed y
BE BE BE
, ,
+ =

Where:
Sep 2007 Pipeline of gas supplier was commissioned and gas fed to the plant in Sep 2007. First
gas procured in Sep 2007. Gas supplies were partially available subsequently
27th Jan 2008 Pre validation discussions were held with DOE
2
nd
July 08 -
4
th
July 2008
Validation visit at site conducted at site. It was felt that the existing methodology
requires setting up of CDR plant as one of the conditionality. It was decided to seek
the deviation on this issue for this methodology.
Oct Dec
2008
Finalisation of approach for Deviation request.
May 2009 100% NG used in the plant for the first time.
7
th
Sep 2009 Request for Deviation submitted to Executive Board
24
th
Sep 2009 Request for deviation not submitted as it was felt that the changes affected the major
applicability conditions
Oct 2009
Onwards
Preparation of revised methodology

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BE
Feed, y
Emissions due to the use of naphtha as feed for the production of urea, in tCO2.

BE
Heat, y
Emissions due to the production of thermal energy used in the furnaces (feed
treatment and reforming), in tCO
2.

Emissions due to the use of naphtha as feed (BE
Feed, y
)

The emissions due to the use of naphtha as feed for the production of urea are calculated as
follows:

y Urea y Naptha y Feed
BS BE BE
, , ,
=

Where:
BE
Naphtha, y
Quantity of CO
2
that would be produced from naphtha in the baseline, in tCO
2
.

BS
Urea, y
Equivalent CO
2
quantity of the carbon (C) that is included the product of urea
in the urea production process, in tCO
2.

The quantity of CO
2
that would be produced from naphtha in the baseline is calculated as:

BL Naptha Naptha y PJ Urea y Naptha
CF SFC P BE
, , , ,
. . .
12
44
=

Where:
P
Urea, PJ, y
Production of urea in each year y of the crediting period, in tonnes.

SFC
Naphtha
Specific feed consumption ratio for the production of urea in the three
most recent years previous to the implementation of the project activity,
tones of naphtha/tonnes of urea.

CF
Naphtha, BL
Carbon fraction of Naptha used in the baseline as feed, in tonnes of
Carbon/tonnes of naphtha.

44/12 Ratio between the molecular weights of CO2 and carbon, mass
units/mass units.

The specific feed consumption ratio is calculated as follows:

=
=
=
3
1
, ,
3
1
, ,
k
k BL Urea
k
k BL Naptha
Naptha
P
F
SFC


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Where:

k BL Urea
P
, ,
Production of urea in each one of the three most recent years k previous to the
implementation of the project activity, in tonnes.

k BL Naptha
F
, ,
Quantity of naphtha used as feed in each one of the three most recent years k
previous to the implementation of the project activity, in tonnes.

CF
Naphtha,BL
ie Carbon fraction of naphta used in the baseline as feed, in tonnes of carbon/tonnes
of naphtha is obtained as per Monitoring Plan. Density of naphtha from suppliers certificates is
used as source of data and CF
Naphtha,BL
is calculated as under :
CF
Naptha
,
BL,K
which is the ratio of Carbon content (% by weight) of naphtha in each one of the
three most recent years k previous to the implementation of the project activity is determined as
under:
CF
Naptha
,
BL,,K
=
Hydrogen Carbon
Carbon
Kg Kg
Kg
+

As naphtha is a hydrocarbon and consists of hydrogen and carbon, CF
Naptha
,
BL,K
is determined as
below:
Hydrogen content (% by weight) of naphtha = 26 - 15* D
k
(As per Indian National
Standard, BIS: 1448 [P: 7]
1960 Annexure 30)
Carbon content (% by weight) of naphtha =100 Hydrogen content (% by weight) of
naphtha
= 100 ( 26-15 D) = 74 + 15* D
k,

Therefore, Carbon content (% by weight) of naphtha is obtained from above as under:

CF
Naptha
,
BL,K
=
100
* 15 74
k
D +

where

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D
k
= Weighted Average Density obtained from Suppliers certificates for the most recent three
years of baseline period
D
k
=
n
n n
w w w w
w d w d w d w d
....... ..........
* ...... .......... * * *
3 2 1
3 3 2 2 1 1
+ + +
+ + +

(7)
Where:
d
1
,d
2
,d
3
,d
n
: Densities of Naptha procured at 1,2,3,n batches during year k
w
1
,w
2
,w
3
w
n
: Weight of Naptha procured at 1,2,3,n batches during year k
and CF
Naphtha,BL
is

3
CF
CF
3
1
k BL, Naphtha,
BL Naphtha,
=
=
k

The CO
2
required to produce urea is calculated as follows:

y PJ Urea y Urea
P BS
, , ,
.
60
44
=

44/60 = 44/12*12/60. 44/12 represents conversion factor from carbon to carbon
dioxide and 12/60 is ratio of carbon mass (each urea molecule has one molecule
of carbon) to urea mass in one molecule of urea (molecular weight 60).

Emissions due to the production of thermal energy used in the furnaces (
y Heat
BE
,
)

The CO2 emissions from thermal energy are calculated as follows:

y BL CO Naptha y PJ Urea y Heat
EF SEC P BE
, , , , ,
2
. . =

where:

EF
CO2, BL, y
CO2 emission factor for the baseline fuel that would be used in the
furnaces (feed treatment and reforming) in each year y of the crediting
period, in tCO2/TJ.

SEC
Naphtha
Specific thermal energy consumption ratio in the urea production
process (feed treatment and reforming) in the three most recent years
previous to the implementation of the project activity, TJ/tonnes of urea.


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page 42

The emission factor for the fuel that would be used in furnace ( EF
CO2, BL, y
) must be chosen as
the lowest of the emission factors among the fuels used in three most recent years prior to the
implementation of the project activity and the fuels used in the relevant year y of the crediting
period.

For the determination of emission factors, guidance from the 2006 IPCC Guidelines for National
Greenhouse Gas Inventories has been followed where appropriate. Project participants may
either conduct measurements or they may use accurate and reliable local or national data where
available. Where such data is not available, IPCC default emission factors (country-specific, if
available any) may be used if they are deemed to reasonably represent local circumstances. All
values should be chosen in a conservative manner and the choice should be justified and
documented in the CDM-PDD. Where measurements are undertaken, project participants may
estimate the emission factors or net calorific values ex-ante in the CDM-PDD and should
document the measurement results after implementation of the project activity in their
monitoring reports.

The specific thermal energy consumption ratio is calculated as follows:

) (
=
k
k BL Urea
k i
k i k i BL
Naptha
P
NCV FC
SEC
, ,
, , ,
.

Where:
FC
BL,i,k
Quantity of fuel of type i consumed in the furnaces (feed treatment and
reforming) in each one of the most recent three years k previous to the
implementation of the project activity, in tones.
NCV
i,k
Net calorific value of fuel type i in each one of the most recent three years k
previous to the implementation of the project activity, in TJ/tonnes.

k The most recent three years prior to the implementation of the project activity

i Fossil fuel types used in the years k

Project Emissions

Project activity emissions are calculated as follows:

y CDR y Heat y Feed y
PE PE PE PE
, , ,
+ + =

Where:

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page 43

PE
Feed,y
Emissions due to the use of NG/LNG as feed for the production of urea in each
year y of the crediting period, in tCO2.
PE
Heat,y
Emissions due to the production of thermal energy used in the furnaces (feed
treatment and reforming) after deducting the CO
2
recovered by the CDR plant (if
any) in each year y of the crediting period, in tCO
2
.

PE
CDR,y
Emissions due to the production of energy used by the CDR plant (if any) in
each year y of the crediting period, in tCO2.

Emissions due to the use of NG/LNG as feed (PE
Feed,y
)

The emissions due to the use of NG/LNG as feed for the production of urea are calculated as
follows:

y Urea y PJ y Feed
PS PE PE
, , ,
=

Where:

PE
PJ,y
Quantity of CO2 produced from NG/LNG in each year y of the crediting period, in
tCO2.

PS
urea,y
Quantity of CO2 required for the production of urea in each year y of the crediting
period, in tCO2.

The quantity of CO2 produced from NG/LNG is calculated as follows:

( )
PJ Naptha y PJ Naptha NG y PJ NG y PJ
CF F CF F PE
, , , , , ,
. .
12
44
+ =

Where:

F
NG,PJ,y
Consumption of NG/LNG as feed during the year y of the crediting period, in
tonnes. If the available data are measured in volume units use the appropriate
density of NG, corrected for temperature and pressure, to calculate the
equivalent mass.

CF
NG
Carbon content, expressed as weight fraction, of NG/LNG used as feed during
year y of the crediting period, in tonnes of carbon/tonnes of NG/LNG.

F
Naphtha,PJ,
y Consumption of naphtha as feed during the year y of the crediting period, in
tonnes.

CF
Naphtha,PJ
Carbon content, expressed as weight fraction, of naphtha used as feed during
year y of the crediting period, in tonnes of carbon/tonnes of naphtha.

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CF
Naphtha,PJ,Y
ie Carbon fraction of naphta used in the project as feed, in tonnes of carbon/tonnes
of naphtha for the year y is obtained as per Monitoring Plan. As density of naphtha from
suppliers certificates is expected to be used as source of data, CF
Naphtha,PJ,Y
shall be calculated as
under :
CF
Naphtha,PJ,Y
=
Hydrogen Kg Carbon Kg
Carbon Kg
... ...
...
+

(16)

As naphtha is a hydrocarbon and consists of hydrogen and carbon, CF
Naphtha,PJ,Y
is the ratio of
Carbon content (% by weight) of naphtha and is determined as under :
Hydrogen content (% by weight) of naphtha = 26 - 15*D
, y
(As per Indian National
Standard, IS: 1448 [P: 7]
1960 Annexure 30)
Carbon content (% by weight) of naphtha =100 Hydrogen content (% by weight) of
naphtha
= 100 ( 26-15 D
, Y
) = 74 + 15*D
, Y

Therefore, Carbon content (% by weight of carbon in naphtha ) of naphtha CHR
Naptha, PJ, y
is as
under:

CHR
Naptha, PJ, y
=
100
* 15 74 Dy +

where
D
, y
= Weighted Average Density for the year y
D
, y
=
n
n n
w w w w
w d w d w d w d
....... ..........
* ...... .......... * * *
3 2 1
3 3 2 2 1 1
+ + +
+ + +
(18)
Where:
d
1
,d
2
,d
3
,d
n
: Densities of Naptha obtained from Suppliers certificates for 1,2,3,n
batches
during year y
w
1
,w
2
,w
3
w
n
: Weight of Naptha procured at 1,2,3,n batches during year y

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page 45

The quantity of CO2 required for the production of urea is calculated as follows:

y PJ Urea y Urea
P PS
, , ,
.
60
44
=

Emissions from thermal energy (PE
Heat,y
)

Emissions due to the production of thermal energy used in the furnaces (feed treatment and
reforming) after deducting the CO
2
recovered by the CDR plant (if any) is calculated as follows

)
y PJ CO y i y i y Heat
EF NCV FC PE
, , , ,
, 2
. .
\
|
=

Where:

FCi,y Quantity of fuel type i consumed in the furnaces (feed treatment and reforming)
in each year y of the crediting period, in mass or volume units.

NCVi,y Net calorific value of fuel type i in each year y of the crediting period, in
TJ/mass or volume units.

EF
CO2,PJ,y
CO
2
emission factor of the fuel type with the lowest emission factor among all
the i fossil fuels used in the furnaces (feed treatment and reforming) in each year
y of the crediting period, in tCO2/TJ.

Greenhouse Gas Inventories should be followed where appropriate. Project participants may
either conduct measurements or they may use accurate and reliable local or national data where
available. Where such data is not available, IPCC default emission factors (country-specific, if
available any) may be used if they are deemed to reasonably represent local circumstances. All
values should be chosen in a conservative manner and the choice should be justified and
documented in the CDM-PDD. Where measurements are undertaken, project participants may
estimate the emission factors or net calorific values ex-ante in the CDM-PDD and should
document the measurement results after implementation of the project activity in their
monitoring reports.

Emissions from CDR (PE
CDR,y
)

Since the installation of CDR plant is not carried out in the project activity as a means to make
up for reduced requirement of CO
2
so it is considered as zero.
i.e. 0
,
=
y CDR
PE

Leakage

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The leakage (LEy) in the project activity would be due to feed extraction, processing,
liquefaction, transportation, re-gasification and distribution of feed outside of the project
boundary. This includes mainly fugitive CH4 emissions and CO2 emissions from associated fuel
combustion and flaring. In this methodology, the following leakage emission sources shall be
considered.

Fugitive CH4 emissions associated with feed extraction, processing, liquefaction,
transportation, re-gasification and distribution of natural gas used in the project plant
and fossil fuels used in the grid in the absence of the project activity.

In the case LNG is used in the project plant: CO2 emissions from fuel combustion /
electricity consumption associated with the liquefaction, transportation, re-gasification
and compression into a natural gas transmission or distribution system.

Thus, leakage emissions are calculated as follows:

y CO LNG y CH y
LE LE LE
, , ,
2 4
+ =

Where:

LECH
4
,y Leakage emissions due to fugitive upstream CH4 emissions in the year y, in
tCO2.

LELNG, CO2, y Leakage emissions due to fossil fuel combustion / electricity consumption
associated with the liquefaction, transportation, re-gasification and compression
of LNG into a natural gas transmission or distribution system during the year y,
in tCO2.

Fugitive methane emissions

The methodology used for calculating Leakage emissions due to fugitive upstream CH4
emissions is based on ACM 009 Consolidated baseline and monitoring methodology for fuel
switching from coal or petroleum fuel to natural gas Version 3.2.
As per the methodology, the project participants should multiply the quantity of natural gas
consumed in all element processes i with a methane emission factor for these upstream emissions
(EF
NG,upstream,CH4
), and subtract for all fuel types k which would be used in the absence of the
project activity the fuel quantities multiplied with respective methane emission factors
(EF
k,upstream,CH4
), as follows:
4 4 , , , , 4 , , , , , 4 CH CH upstream k k
k
y k baseline CH upstream NG y NG y project y CH
GWP EF NCV FF EF NCV FF LE
(

with

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page 47

=
i
y i project y project
FF FF
, , ,

and
=
i
y k i baseline y k baseline
FF FF
, , , , ,

Where:
L
CH4,y
= Leakage emissions due to upstream fugitive CH
4
emissions in the year y in t CO
2
e
FF
project,y
= Quantity of natural gas combusted in all element processes during the year y in m

FF
project,i,y
= Quantity of natural gas combusted in the element process i during the year y in m

NCV
NG,y
= Average net calorific value of the natural gas combusted during the year y in
GJ/m

EF
NG,upstream,CH4
= Emission factor for upstream fugitive methane emissions from production,
transportation and distribution of natural gas in t CH
4
per GJ fuel supplied to final
consumers
FF
baseline,k,y
= Quantity of fuel type k (a coal or petroleum fuel type) that would be combusted in
the absence of the project activity in all element processes during the year y in a
volume or mass unit
FF
baseline,i,k,y
the absence of the project activity in the element process i during the year y in a
volume or mass unit
NCV
k
= Average net calorific value of the fuel type k (a coal or petroleum fuel type) that
would be combusted in the absence of the project activity during the year y in GJ
per volume or mass unit
EF
k,upstream,CH4
= Emission factor for upstream fugitive methane emissions from production of the
fuel type k (a coal or petroleum fuel type) in t CH
4
per GJ fuel produced
GWP
CH4
= Global warming potential of methane valid for the relevant commitment period

Where reliable and accurate national data on fugitive CH4 emissions associated with the
production, and in case of natural gas, the transportation and distribution of the fuels is available,
project participants should use this data to determine average emission factors by dividing the
total quantity of CH4 emissions by the quantity of fuel produced or supplied respectively. Where
such data is not available, project participants may use the default values provided in table
below. Note that the emission factor for fugitive upstream emissions for natural gas (EF
NG,
upstream, CH4
) should include fugitive emissions from production, transport and distribution of
natural gas, as indicated in the table below.


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Table 1: Default emission factors for fugitive CH
4
upstream emissions
2

Activity Unit
Default
emission
factor
Reference for the underlying emission
factor range in Volume 3 of the 1996
Revised IPCC Guidelines
Coal
Underground mining t CH4 / kt coal 13.4 Equations 1 and 4, p. 1.105 and 1.110
Surface mining t CH4 / kt coal 0.8 Equations 2 and 4, p.1.108 and 1.110
Oil
Production t CH4 / PJ 2.5 Tables 1-60 to 1-64, p. 1.129 - 1.131
Transport, refining and storage t CH4 / PJ 1.6 Tables 1-60 to 1-64, p. 1.129 - 1.131
Total t CH4 / PJ 4.1
Natural gas
USA and Canada
Production t CH4 / PJ 72 Table 1-60, p. 1.129
Processing, transport and distribution t CH4 / PJ 88 Table 1-60, p. 1.129
Total t CH4 / PJ 160
Eastern Europe and former USSR
Western Europe
Other oil exporting countries / Rest of world
Production t CH4 / PJ 68 Table 1-63 and 1-64, p. 1.130 and 1.131
Processing, transport and distribution t CH4 / PJ 228 Table 1-63 and 1-64, p. 1.130 and 1.131
Note: The emission factors in this table have been derived from IPCC default Tier 1 emission factors provided in Volume 3 of the 1996 Revised
IPCC Guidelines, by calculating the average of the provided default emission factor range.

CO
2
emissions from LNG

Since LNG is used as feed at the project activity, CO2 emissions from fuel combustion /
electricity
consumption associated with the liquefaction, transportation, re-gasification and compression of
LNG into a natural gas transmission or distribution system (L2LNG, CO2 ,y) should be estimated by
multiplying the
quantity of natural gas combusted in the project with an appropriate emission factor, as follows:

y LNG upstream CO y NG y PJ NG y CO LNG
EF NCV F LE
, , , , , , , ,
2 2
. . =

DO


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Where:

EFCO2, upstream, LNG,y Emission factor for upstream CO2 emissions due to fossil fuel
combustion /
Electricity consumption associated with the liquefaction, transportation,
re-
gasification and compression of LNG into a natural gas transmission or
distribution system in year y, in tCO2/TJ.

Where reliable and accurate data on upstream CO2 emissions due to fossil fuel combustion /
electricity
consumption associated with the liquefaction, transportation, re-gasification and compression of
LNG into a natural gas transmission or distribution system is available, project participants
should use this data to determine an average emission factor. Where such data is not available,
project participants may assume a default value of 6 tCO2/TJ as a rough approximation.

Emissions Reductions

The emissions reductions are calculated as:
y y y y
LE PE BE ER =

B.6.2. Data and parameters that are available at validation:

Data / Parameter: P
urea,BL,y

Data unit: Tonnes
Description: Production of Urea in each one of the most recent three years k previous to the
Implementation of the project activity.
Source of data used: FICC Proforma 2004 05, 2005 06, 2006 07
Value Applied 2004 05 2005 06 2006 07
379000 381300 361156
Justification of the
choice of data or
description of
measurement
methods and
procedures actually
applied :
Fertiliser Industry Coordination Committee (FICC) is a statutory Government of
India body, which collects all the data regarding raw materials, production, costs
etc. The urea production is same as that provided to the FICC (Annexure 10) and
based on Ammonia input to Urea plant. This has been cross checked with
companys Annual Report figures (Annexure 11)
Any comment: -

Data / Parameter: FNaphtha,BL,I
Data unit: Tonnes
Description: Quantity of naphtha used as feed in each one of the three most recent years k
previous to the implementation of the project activity.
Source of data used: Plant daily feed naphtha consumption record register for 2004 05, 2005 06

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and 2006 07 ( See Annexure 32)
Value Applied 2004 05 2005 06 2006 07
101069 101120 97773
choice of data or
description of
measurement methods
and procedures
actually applied :
The quantity of Feed Naphtha is measured from Flow Summer (FS 201) in
pipeline and recorded in the Daily Efficiency Register (See Annexure 32). The
above figures are the yearly total of the daily feed naphtha used in Ammonia
Plant. This figure, when added to the Fuel naphtha consumed, gives the total
naphtha consumed in the plant on a given day. The daily naphtha consumption is
then added during the month to get the monthly naphtha consumption.

Monthly naphtha consumption can be verified with the monthly receipts of
Naphtha from the refinery from the purchase invoices of the supplier.

Fertiliser Industry Coordination Committee is a statutory Government body, to
which collects the data regarding raw materials, production, cost etc. The total
annual naphtha shall be verified with the data provided to the FICC. (Annexure
10) This can also be verified with companys Annual Report figures (Annexure
11).
Any comment: -

Data / Parameter: FCBL,i,k
Data unit: Tonnes
Description: Quantity of Naphtha consumed in the furnaces (feed treatment and reforming) in
each one of the most recent three years k previous to the implementation of the
project activity.
Source of data used: Plant daily fuel naphtha consumption record register for 2004 05, 2005 06
and 2006 07 ( See Annexure 32)
Value Applied 2004 05 2005 06 2006 07
65432 66192 63284
choice of data or
description of
measurement methods
and procedures
actually applied :
The quantity of Fuel Naphtha is measured from Flow Summer ( FS 204) in
pipeline and recorded in the Daily Efficiency Register. The above figures are the
yearly total of the fuel naphtha used in Ammonia Plant. ( See Annexure 32)This
figure, when added to the Feed naphtha consumed, gives the total naphtha
consumed in the plant on a given day. The daily naphtha consumption is then
added during the month to get the monthly naphtha consumption.

Monthly naphtha consumption can be verified with the monthly receipts of
Naphtha from the refinery from the purchase invoices of the supplier.

Fertiliser Industry Coordination Committee is a statutory Government body, to
which collects the data regarding raw materials, production, cost etc. The total
annual naphtha shall be verified with the data provided to the FICC. (Annexure
10) This can also be verified with companys Annual Report figures (Annexure
11).
Any comment: -


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Data / Parameter: NCVi,k
Data unit: TJ/tonnes
Description: Net calorific value of fuel type i consumed in the furnaces (feed treatment and
reforming) in each one of the most recent three years k previous to the
implementation of the project activity.
Source of data used: NCV in kcal / kg obtained from naphtha quality certificates from suplier and
weighted average for the year calculated ( Annexure 31) and reported to FICC
(See Annexure 10)
Value Applied 2004 05 2005 06 2006 07
10575 10567 10575
choice of data or
description of
measurement methods
and procedures
actually applied :
NCV in Kcal / kg converted into TJ/ Ton by mathematical calculation (Please
see Annexure 32)
Any comment: -

Data / Parameter: CF
Naphtha,BL

Data unit: tonnes of carbon/tonnes of naphtha
Description: Carbon fraction of naphtha used in the baseline as feed
Source of data used: Density as reported in Quality Test report for Naphtha by suppliers lab
Value Applied 0.845
choice of data or
description of
measurement methods
and procedures
actually applied :
Carbon fraction has been derived from measured, weighted average density of
naphtha received during the year and hydrogen weight fraction of naphtha
calculated as per IS:1448 -1960 code given by Bureau of Indian Standards , a
Govt. of India body.

Using the measured density of 0.6992 ( average for 3 years, 2004 05, 2005
06, and 2006 07, see Annexure -31), the C/H is calculated to be 0.845. The
calculation is provided in worksheet in Annexure 32
Any comment:

Data / Parameter: D
n
,
k
i.e. Density of naphtha for batch n in year k
Data unit: g/ml
Description: Density of Naphtha as obtained from Suppliers quality certificates for batch n
in each one of the three most recent years k previous to the implementation of
the project activity
Source of data used: Suppliers quality certificates. ( See Annexure 31 for the detail)
Value Applied 2004 05 2005 06 2006 07
0.6937 0.70631 0.7002
choice of data or
description of
measurement
Plant Records

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methods and
procedures actually
applied :
Any comment: -

Data / Parameter: w
n,k

Data unit: Tonnes of naphtha delivered at site through one batch
Description: Naphtha shall be delivered at site through railway rakes. The quantity of naphtha
delivered through one such railway rake during in each one of the three most
recent years k previous to the implementation of the project activity shall be
considered as one batch of naphtha and measured in tonnes
Source of data: The weight of naphtha delivered through one railway wake ( one batch) shall be
as taken from the purchase receipts of naphtha delivered from that railway rake. (
Annexure -31)
Value Applied 2004 05 2005 06 2006 07
171086 164155 163729
choice of data or
description of
measurement
methods and
procedures actually
applied :
None
Any comment: -

B.6.3 Ex-ante calculation of emission reductions:
>>
Estimation of baseline emissions:

Baseline emission is calculated as the difference between the CO
2
produced using Naptha as feed
and the CO
2
consumed during the process for the production of urea plus the emission of CO
2
as
flue gases to the atmosphere.

The parameters used for the baseline emissions are as follows and the derivation is provided in
Annexure -30. The CER Calculation Sheet is also attached as Annexure -33.

P
Urea, PJ,y
: 379,000 Tons Urea / yr
SFC
Naphtha
: 0.2675 Ton Feed Naphtha / Ton Urea
CF
Naphtha,BL
: 0.845 Ton carbon / Ton Naphtha
SEC
Naphtha
: 0.00768 TJ Naphtha / Ton Urea
EF
CO2 BL,y
: 73.3 T CO2 / TJ

Feed,y
)


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The quantity of CO
2
that would be produced from feed naphtha in the baseline is
BL Naptha Naptha y PJ Urea y Naptha
CF SFC P BE
, , , ,
. . .
12
44
=
= (44 / 12) x 379000 x 0.267475 x 0.845
= 314,088 t CO
2

The CO
2
required to produce urea is
y PJ Urea y Urea
P BS
, , ,
.
60
44
=
= (44 / 60) x 379000
= 277,933 t CO
2

Feed,y
)

= 314088 - 277933
= 36,154 tCO
2

Emissions due to the production of thermal energy used in the furnaces (
y Heat
BE
,
)
The CO2 emissions from thermal energy are calculated as follows:

y BL CO Naptha y PJ Urea y Heat
EF SEC P BE
, , , , ,
2
. . =
= 379,000 x 0.007682 x 73.3
= 213,410 tCO
2

Total Baseline emission:

The baseline emissions are calculated as follows:

y Heat y Feed y
BE BE BE
, ,
+ =
= 36,154 + 213,410
= 249,563 tCO
2

Estimation of project emission:

Project emission is calculated as the difference between the CO
2
produced using NG and Naphtha
as feed and the CO
2
consumed during the process for the production of urea plus the emission of
CO
2
as flue gases to the atmosphere. As CDR is not installed, the emissions on account of CDR
ie PE
CDR,y
shall be zero.

The parameters used for the project emissions are as follows and the derivation is provided as
Annexure 30:

P
Urea, PJ,y
: 379,000 Tons Urea / yr

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F
NG, PJ,y
: 122,233 Ton Feed NG / Yr
FC
NG,y
: 22,924 Ton Fuel NG / Yr
CF
NG,y
: 0.7507 Ton Carbon / Ton NG
NCV
NG
,
y
: 0.0494 TJ / Ton NG
FC
Syn Gas,,y
: 48669460 NM3 of Syn Gas / Yr
NCV
Syn gas
,
y
: 1960 Kcal / NM3
EF
CO2 PJ,y
: 56.1 Ton CO
2
/ Ton TJ
F
Naphtha, PJ,y
: 0 Ton Feed Naphtha / Yr
CF
Naphtha,BL
: 0.845 Ton Carbon / Ton Naphtha
EFNG, upstream, CH4 : 0.016 Ton CH
4
/ TJ
GWP
CH4
: 21 Ton CO
2
/ T CH
4

EFCO2, upstream,
LNG,y
: 6 Ton CO2 / TJ ( As per AM 0050)

Emissions due to the use of Natural gas as feed

The quantity of CO2 produced from NG/LNG is calculated as follows:
( )
PJ Naptha y PJ Naptha NG y PJ NG y PJ
CF F CF F PE
, , , , , ,
. .
12
44
+ =
= (44/12) x (122,233 x 0.7507 + 0 x 0.845)
= 336,454 t CO
2

The quantity of CO2 required for the production of urea is calculated as follows:
y PJ Urea y Urea
P PS
, , ,
.
60
44
=
= (44 / 60) x 379,000
= 277,933 t CO
2

The emissions due to the use of NG/LNG as feed for the production of urea are calculated as
follows:
y Urea y PJ y Feed
PS PE PE
, , ,
=
= 336,454 277,933
= 58,521 tCO
2

Emissions from thermal energy (PEHeat,y)
)
y PJ CO y i y i y Heat
EF NCV FC PE
, , , ,
, 2
. .
\
|
=

= 22,924 x 0.0494 x 56.1 + 48669460 x 1960 x 0
= 63,530 tCO
2

Emissions from CDR (PE
CDR ,y
)
0
,
=
y CDR
PE


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Project activity emissions are calculated as follows:

y CDR y Heat y Feed y
PE PE PE PE
, , ,
+ + =
= 58,521 + 63,530 + 0
= 122,051 tCO
2

Estimation of leakages from project activity:

The leakage in the project activity would be due to feed extraction, processing, liquefaction,
transportation, re-gasification and distribution of feed outside of the project boundary. This
includes mainly fugitive CH4 emissions and CO2 emissions from associated fuel combustion
and flaring.

Thus, the leakage emissions are calculated as follows:

LE = LE
CH4
+ LE
LNG,CO2

Where:
LE
CH4
Leakage emissions due to fugitive upstream CH4 emissions

LE
LNG,CO2
Leakage emissions due to fossil fuel combustion / electricity consumption
associated with the liquefaction, transportation, re-gasification and compression
of LNG into a natural gas transmission or distribution system

Estimation of LE
CH4
( Leakage emissions due to fugitive upstream CH4 emissions)

The methodology used for calculating Leakage emissions due to fugitive upstream CH4
emissions is based on ACM 009 Consolidated baseline and monitoring methodology for fuel
switching from coal or petroleum fuel to natural gas Version 3.2.
As per the methodology, the project participants should multiply the quantity of natural gas
consumed in all element processes i with a methane emission factor for these upstream emissions
(EF
NG,upstream,CH4
), and subtract for all fuel types k which would be used in the absence of the
project activity the fuel quantities multiplied with respective methane emission factors
(EF
k,upstream,CH4
), as follows:
4 4 , , , , 4 , , , , , 4 CH CH upstream k k
k
y k baseline CH upstream NG y NG y project y CH
GWP EF NCV FF EF NCV FF LE
(

with
=
i
y i project y project
FF FF
, , ,

and

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=
i
y k i baseline y k baseline
FF FF
, , , , ,

Where:
L
CH4,y
= Leakage emissions due to upstream fugitive CH
4
emissions in the year y in t CO
2
e
FF
project,y
= Quantity of natural gas combusted in all element processes during the year y in m

FF
project,i,y
= Quantity of natural gas combusted in the element process i during the year y in m

NCV
NG,y
= Average net calorific value of the natural gas combusted during the year y in
GJ/m

EF
NG,upstream,CH4
= Emission factor for upstream fugitive methane emissions from production,
transportation and distribution of natural gas in t CH
4
per GJ fuel supplied to final
consumers
FF
baseline,k,y
the absence of the project activity in all element processes during the year y in a
volume or mass unit
FF
baseline,i,k,y
the absence of the project activity in the element process i during the year y in a
volume or mass unit
NCV
k
= Average net calorific value of the fuel type k (a coal or petroleum fuel type) that
would be combusted in the absence of the project activity during the year y in GJ
per volume or mass unit
EF
k,upstream,CH4
= Emission factor for upstream fugitive methane emissions from production of the
fuel type k (a coal or petroleum fuel type) in t CH
4
per GJ fuel produced
GWP
CH4
= Global warming potential of methane valid for the relevant commitment period

The above expression can be simplified based on the following facts:

a. The Naphtha was the only feedstock being used as fuel and feed in the Primary reformer
feed in the Baseline case
b. Natural Gas is the only feedstock being used as fuel and feed in the Primary reformer
feed in the Project case
c. As per the Table 3 of the ACM 0009 i.e., Default emission factors for fugitive CH
4

upstream emissions, the emission factor for oil is 4.1 Mt CH4 / TJ which is much lower
than that in case of NG. Thus for simplification, the reduction in CH4 emission due to
stoppage of the use of Naphtha has been considered as zero in our case. This shall only
lead to more conservative results.

Based on above simplifying assumptions, the above expression is
[ ]
4 4 , , , , , 4 CH CH upstream NG y NG y project y CH
GWP EF NCV FF LE =

To calculate methane emission factor for upstream fugitive methane emissions from production,
transportation and distribution, we use the Table 3 from ACM 0009 (Page 9) and reproduced
above for easy reference.

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Table 2: Default emission factors for fugitive CH
4
upstream emissions
3

Activity Unit
Default
emission
factor
Reference for the underlying emission
factor range in Volume 3 of the 1996
Revised IPCC Guidelines
Coal
Underground mining t CH4 / kt coal 13.4 Equations 1 and 4, p. 1.105 and 1.110
Surface mining t CH4 / kt coal 0.8 Equations 2 and 4, p.1.108 and 1.110
Oil
Production t CH4 / PJ 2.5 Tables 1-60 to 1-64, p. 1.129 - 1.131
Transport, refining and storage t CH4 / PJ 1.6 Tables 1-60 to 1-64, p. 1.129 - 1.131
Total t CH4 / PJ 4.1
Natural gas
USA and Canada
Eastern Europe and former USSR
Western Europe
Other oil exporting countries / Rest of world
Production t CH4 / PJ 68 Table 1-63 and 1-64, p. 1.130 and 1.131
Processing, transport and distribution t CH4 / PJ 228 Table 1-63 and 1-64, p. 1.130 and 1.131
Note: The emission factors in this table have been derived from IPCC default Tier 1 emission factors provided in Volume 3 of the 1996 Revised
IPCC Guidelines, by calculating the average of the provided default emission factor range.

In SFCs project activity, the gas production, processing and distribution infrastructure was
created during 2002 2004 and is of recent vintage. The LNG is being sourced by Petronet LNG
Limited, India from Ras Laffan Liquefied Natural Gas Company Limited (Ras Gas) Liquefaction
Trains. Ras Gas is a joint venture company established in 2001 by US Oil multi national
company Exxon Mobil and Qatar Petroleum. The EPC (Engineering, Management and
Construction) contract was undertaken by Joint venture of M/s Chiyoda, Japan and M/s
Snamprogetti, Italy. State of art technologies were used for construction and operation of
liquefaction terminals that were completed in 2004 - 2005. ( Kindly see www.qatargas.com for
the details).

DO


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The LNG received from Ras Gas is regassified in the Dahej Regassification terminal of M/s
Petronet India. The terminal was commissioned for supply of LNG to its customers like SFC in
Mar 2004. The Company had awarded the EPC (Engineering, Procurement & Construction)
Contract to a consortium led by M/s Ishikawajima Harima Heavy Industries Company Ltd. (IHI),
Japan. The other members of the consortium were M/s Ballast Nedam International BV-
Netherlands, M/s Toyo Engineering India Limited, M/s Itochu Corporation, M/s Mitsui
Company Limited, Japan and M/s Toyo Engineering Corporation, Japan. The Consortium
Leader ie M/s IHI is one of the most reputed construction companies in the field of LNG
Regasification terminals. PLL had selected M/s Foster Wheeler Energy Limited, UK as the
Project Management Consultant (PMC). Foster Wheeler has over a century of experience,
reputation for engineering excellence and world-class construction standards. It has built
process, power and industrial facilities in more than 125 countries. (Kindly see
http://www.petronetlng.com/epc-pmc-dahej.asp). The terminal has been constructed according to
the latest international design standards like European EN-1473, US National Fire Protection
Associations NFPA-59A, and British BS7777. The terminal is also under compliance with the
ISO 9001 and OHSAS 18001.

PLL is also responsible for the arrangement of transportation of LNG from RasGas in Qatar to
PLL's Regasification Terminal at Dahej. PLL signed Time Charter Agreements on 31st March,
2001 with the Consortium of ship-owners led by M/s Mitsui OSK Lines Limited of Japan a
leading company in LNG shipping business, for Time Charter of two LNG Tankers. M/s Mitsui
OSK Lines is one of the largest operator in the world of LNG tonnage They have got 2 ships
constructed by Daewoo Shipbuilding and Marine Engineering Company (DSME), South Korea.
The LNG Tankers are built as per Bureau Veritas Classification and Indian Register of Shipping.
(Kindly see http://www.petronetlng.com/lng-transportation-dehej.asp)

From PLLs Dahej plant, gas is transported to SFCs plant by Gas Authority of India Ltd. which
is Govt. of India undertaking and the 2nd largest gas transport company in Asia. The pipeline
has been designed by M/s Veeco, Canada using ASME 31.8 code. This ASME ( American
Society of Mechanical Engineers) code is an internationally approved and followed by all gas
companies. The code covers the design, fabrication, installation, inspection, testing, and other
safety aspects of operation and maintenance of gas transmission and distribution systems,
including gas pipelines, gas compressor stations, gas metering and regulation stations, gas mains,
and service lines up to the outlet of the customers meter set assembly. The material used was as
per API 1102 code (American Petroleum Institute) and the welding / construction was as per API
1104 code which is the internationally approved codes. The construction and safety guidelines
were also as per the Oil Industry Safety Directorate Guideline, which is the premier Indian Govt
agency in this area.

Thus it is evident from above that the gas production, processing and distribution infrastructure
is of a recent vintage and technology. It was designed and built by reputed international,
multinational and national companies which are well known for their engineering excellence and
use international codes for design and construction. Therefore it is felt that fugitive methane

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emissions corresponding to US / Canada can be used. This is as per ACM 009 ( Page 9/16)
which allows leakage emission for such new projects to be considered similar to US / Canada.

Based on this, EFNG, upstream, CH4 is considered as 160 T CH4 / Pico J i.e., 0.160 T CH4 / TJ.

Fugitive methane emissions
4 4 4
. . .
, , , , , , CH CH upstream NG y NG y PJ NG y CH
GWP EF NCV F LE =
= 122,233 x 0.0494 x 0.16 x 21
= 20,289 tCO
2

CO
2
emissions from LNG
y LNG upstream CO y NG y PJ NG y CO LNG
EF NCV F LE
, , , , , , , ,
2 2
. . =
= 122,233 x 0.0494 x 6
= 36,230 tCO
2

Thus, leakage emissions are calculated as follows:
y CO LNG y CH y
LE LE LE
, , ,
2 4
+ =
= 20289 + 36230
= 56,519 tCO
2

Estimation of Emission Reductions:

The emissions reductions are calculated as:
y y y y
LE PE BE ER =
= 249,563 - 121,051 - 56,519
= 71,993 t CO
2

= say 71994 t CO
2
( as per the Excel sheet wherein the data rounding off error does not
take place)

B.6.4 Summary of the ex-ante estimation of emission reductions:
>>
Year Estimation of
baseline
emissions, B
(tCO2e)
Estimation of
project activity
emissions, P
(tCO2e)
Estimation of
leakage, L
(tCO2e)
Estimation of
emission reduction,
ER
(tCO2e)
2007-08 249,564 122,051 56,519 71,994
2008-09 249,564 122,051 56,519 71,994
2009-10 249,564 122,051 56,519 71,994
2010-11 249,564 122,051 56,519 71,994
2011-12 249,564 122,051 56,519 71,994
2012-13 249,564 122,051 56,519 71,994
2013-14 249,564 122,051 56,519 71,994
2014-15 249,564 122,051 56,519 71,994

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2015-16 249,564 122,051 56,519 71,994
2016-17 249,564 122,051 56,519 71,994
Total 2,495,640 1,220,510 565,190 719,940

B.7 Application of the monitoring methodology and description of the monitoring
plan:

B.7.1 Data and parameters monitored:
>>

The data and parameters monitored are essentially related to the main activity of production of
urea in the manufacturing facility.

Data / Parameter: P
urea,PJ,y

Data unit: Tonnes
Description: Production of urea in each year y of the crediting period.
Source of data to be
used:
Urea plant data / records.
Value of data applied
for the purpose of
calculating expected
emission reductions in
section B.5
379,000
Description of
measurement methods
and procedures to be
applied:
Daily urea production as reported to FICC, Govt. of India (based on
Ammonia input to Urea plant) and Quarterly urea stock verification
records. Urea Production data shall be collected daily and compiled
into monthly and quarterly reports.
QA/QC procedures to
be applied:
The daily production report is consolidated to prepare Monthly and
Annual Production report and is used in the Balance sheet which shall
be used for cross checking.
Any comment:

Data / Parameter: F
NG,PJ,y

Data unit: Tonnes
Description: Consumption of NG/LNG as feed during the year y of the crediting
period.
used:
On-site measurements through flow-meters and suppliers invoices
for the purpose of
section B.5
121,932 Tonnes
Description of
measurement methods
FIC 2201 Flow meter shall be used for hourly flow measurement by
DCS which shall be automatically added for the entire day. The daily

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applied
reading shall then be complied in tabulated form for CER calculation.
Data shall be cross-check with NG / LNG purchase receipts

If the available data is in volume units, the appropriate density of
NG/LNG, corrected for temperature and pressure, shall be used to
calculate the equivalent mass. Data shall be recorded continuously and
daily consumption figure collected and used for CER calculation
during month
QA/QC procedures to
be applied:
Meter shall be calibrated once in a year as per procedure laid down in
ISO and as per suppliers guidelines.
Any comment: Volumetric unit shall be at NTP.

Data / Parameter: FCi,y
Data unit: Tons
Description: Quantity of fuel type i consumed in the furnaces (feed treatment and
reforming) in each year y of the crediting period.
used:
On site measurements and suppliers invoices
for the purpose of
section B.5:
22,865
Description of
measurement methods
applied:
FIC 2103, FIC 2210 flow meters shall be used for hourly flow
measurement by DCS which shall be automatically added for the
entire day. The daily reading shall then be complied in tabulated form
for CER calculation. Data shall be cross-check with NG / LNG
purchase receipts
.
If the available data is in volume units, the appropriate density of
NG/LNG, corrected for temperature and pressure, shall be used to
calculate the equivalent mass. Data shall be recorded continuously and
daily consumption figure collected and used for CER calculation
during month
QA/QC procedures to
be applied:
Any comment: Volumetric unit shall be at NTP

Data / Parameter: F
Naphtha,PJ,y

Data unit: Tonnes
Description: Consumption of naphtha as feed during the year y of the crediting
period.
Measured at the project activity.
Source of data to be On-site measurements and suppliers invoices

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used:
for the purpose of
section B.5:
0
Description of
measurement methods
applied:
Flow meter FS 201. To be cross-checked with purchase receipts. The
flow measurements shall be monitored continuously by shift staff and
complied on Daily basis

QA/QC procedures to
be applied:
Any comment:

Naphtha,PJ

Data unit: tonnes of carbon/tonnes of naphtha
Description: Carbon content, expressed as weight fraction, of naphtha used as feed
during year y of the crediting period.
used:
Measured at the project activity through laboratory records.
for the purpose of
emission reductions
in section B.5:
0
Description of
measurement
methods and
procedures to be
applied:
Naphtha quality certificates from the suppliers and naphtha quantities
procured. Daily monitoring is being practiced
QA/QC procedures to
be applied:
The analysis should be calculated from Equation 17 provided in this
methodology.
Any comment: -

Data / Parameter: d, y
Data unit: g/ml
Description: Density of Naphtha as obtained from Suppliers quality certificates for
batch n of year y of the crediting period.
used:
Suppliers quality certificates.
for the purpose of
0

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section B.5:
Description of
measurement methods
applied:
Monitoring is being done for every received batch of Naphtha
QA/QC procedures to
be applied:

Any comment: -

Data / Parameter: w
n,y

Data unit: Tons
Description: Naphtha shall be delivered at site through railway rakes. The quantity
of naphtha delivered through one such railway rake during a year
yshall be considered as one batch of naphtha and measured in tonnes
used:
The weight of naphtha delivered through one railway wake ( one
batch) shall be as taken from the purchase receipts of naphtha
delivered from that railway rake
for the purpose of
section B.5:
0
Description of
measurement methods
applied:
Monitoring frequency is for every received batch of Naphtha
QA/QC procedures to
be applied:

Any comment: -

Data / Parameter: NCVi,y and NCV
NG,y

Data unit: TJ/mass or volume units
Description: Average net calorific values of fuel type i and NG/LNG respectively,
in year y of the crediting period.
used:
Calorific values shall be obtained from purchase receipts of NG
supplier
for the purpose of
section B.5:
0.0494 TJ / MT
Description of
measurement methods
Calorific value shall be measured by gas supplier in terms of kcal/scm.
This shall then be converted into to TJ/ MT as per Annexure 30 using

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applied:
corrections for temperature and pressure. The calorific value of the
respective fuel is measured daily and monthly average of calorific
value is calculated by averaging daily value. Yearly average of
calorific value is calculated by averaging monthly value.
QA/QC procedures to
be applied:
The data shall be compiled into monthly reports that shall be compiled
and reviewed by CDM manager
Any comment:

NG

Data unit: Tonnes of carbon / Tonnes of hydrogen
Description: Carbon content, expressed as weight fraction, of NG/LNG used as feed during
year y of the crediting period, in tonnes of carbon / tonnes of NG/LNG
obtained during the project activity.
used:
To be derived from the feed composition or specific gravity report provided
by the gas supplier.
for the purpose of
emission reductions
in section B.5
0.7507
Description of
measurement methods
applied:
NG Composition report or specific gravity shall be obtained from NG supplier
and shall be used to calculate the CF
NG
. ( please see Annexure 30 for
calculation procedure)
QA/QC procedures to
be applied:
The data shall be complied into monthly reports that shall be compiled and
reviewed by CDM manager
Any comment:

Naphtha,PJ

Data unit: Tonnes of carbon / Tonnes of naphtha
Description: Carbon content, expressed as weight fraction, of naphtha used as feed during
year y of the crediting period.
used:
Measured at the project activity through laboratory records and Naphtha
Suppliers Quality Test report for each Naphtha consignment
for the purpose of
emission reductions
in section B.5
0
Description of
measurement methods
applied:
Naphtha quality certificates from the suppliers and naphtha quantities
procured
QA/QC procedures to
be applied:
CF
Naphtha,PJ
shall be calculated from Equation 17 provided in the applicable
methodology AM 0050.

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Any comment: -

Data / Parameter: EF
CO2,BL,y

Data unit: tCO2e/TJ
Description: CO2 emission factor for the baseline fuel that would be used in the furnaces
(feed treatment and reforming) in each year y of the crediting period.
used:
Default value as per 2006 IPCC Guidelines for National Greenhouse Gas
Inventories IPCC has been used. (Annexure 34)

for the purpose of
emission reductions
in section B.5
73.3
Description of
measurement
methods and
procedures to be
applied:
Not Applicable
QA/QC procedures to
be applied:

Any comment: -

CO2,PJ,y

Data unit: tCO2/TJ
Description: CO2 emission factor of fuel type i used in the furnaces (feed treatment
and reforming) in each year y of the crediting period. Chosen as the
emission factor of the fuel type with the lowest emission factor among
all the i fossil fuels used in the furnaces (feed treatment and reforming)
in each year y of the crediting period.
used:
Default value as per 2006 IPCC Guidelines for National Greenhouse
Gas Inventories IPCC has been used (Annexure 34)

for the purpose of
emission reductions
in section B.5
56.1
Description of
measurement
methods and
procedures to be
applied:

QA/QC procedures to -

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be applied:
Any comment: .

CO2,upstream,LNG,y

Data unit: tCO2/TJ
Description: Emission factor for upstream CO2 emissions due to fossil fuel
combustion / electricity consumption associated with the liquefaction,
transportation, re-gasification and compression of LNG into a natural
gas transmission or distribution system in year y.
used:
IPCC guidelines as provided in Approved Methodology AM 0050 (
Page 17 / 28)
for the purpose of
emission reductions
in section B.5
6
Description of
measurement
methods and
procedures to be
applied:
AM 0050 methodology
QA/QC procedures to
be applied:
-
Any comment: -

NG, upstream, CH4

Data unit: tCH4/TJ
Description: CH
4
emission factor for upstream fugitive methane emissions from
production, transportation and distribution of natural gas feed supplied
to final consumers.
used:
To calculate methane emission factor for upstream fugitive methane
emissions from production, transportation and distribution, we use the
Table 3 from ACM 009 (Page 9), using the emission factor for the USA
/ Canada as provided for in the methodology and explained in PDD.

for the purpose of
emission reductions
in section B.5
0.016 in case of R-LNG
Description of
measurement
methods and
procedures to be
applied:
ACM 0009 methodology

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QA/QC procedures to
be applied:
-
Any comment: -

Data / Parameter: FC
Syn Gas,y

Data unit: Mass or volume units
Description: Quantity of Syn Gas consumed in the furnaces (reforming) in each
year y of the crediting period.
used:
On-site measurements
Value of data applied for
the purpose of
section B.5
48669460 NM3 / year based on data from Process Flow Diagram
supplied by the consultant M/s Haldor Topsoe, Denmark
Description of
measurement methods
applied:
Flow-rate meters through FIC 2108 installed in the plant
QA/QC procedures to be
applied:
Meters should be calibrated regularly according to manufacturers
guidelines.
Any comment: Volumetric units should be at normal pressure and temperature

Data / Parameter: Surplus Ammonia
Data unit: Tonnes
Description: Total ammonia sold as product during year y
used:
Annual Report of Company and data submitted to Government of
India
for the purpose of
section B.5
Zero as no Ammonia sale is considered
Description of
measurement methods
applied:
-
QA/QC procedures to
be applied:

Any comment: -

B.7.2 Description of the Monitoring Plan:
>>

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Project proponent will implement the Monitoring Plan by following the management structure
and operational procedures as laid out in detailed Monitoring Plan document attached as
Annexure -3 to PDD.

The document provides guidelines for collection of data, calculation and reporting of CERs as
per the requirements of AM 0050, the PDD for the above CDM project and the guidance
presented in validation manual. It also describes organizational structure and management system
to be implemented by SFC Kota upon CDM project registration

The overall CDM project manager for the proposed project activity will be the Vice President -
Fertilizer. He will be supported by Dy. General Manager ( Fert R &D) who shall be designated as
CDM Manager. CDM Manager shall be fully responsible for developing and implementing the
Monitoring Plan as envisaged in this document and coordinating all activities related to
Verification process

Data required to be monitored as per the Monitoring Plan in accordance within requirements of
AM0050, PDD and comprise of following:
Urea Production, Ammonia Production
Feed and Fuel NG Consumption
NG Receipts from supplier invoices
NG Composition / Specific Gravity and Net Calorific Value
Feed Naphtha and Fuel Naphtha Consumption
Naphtha Receipts if any, Naphtha Density and Net Calorific Value

The organization structure for CDM Project activity shall be as under:

The job responsibilities for CDM Manager, Ammonia Plant, Fert R & D, Vice President (
Fertiliser) and Asst. Gen. Manager ( Instt.) have been clearly defined in Monitoring plan.

The typical workflow for calculation and finalisation of CERs shall be as under :
Vice President
(Fertiliser)
Senior Manager
(Ammonia Plant)
Asst. Engineer
( Fert R & D)
CDM Manager
Dy. General Manager
( Fert. R & D)
Dy. Manager
( Amm / Urea Lab)
Asst. Gen. Manager
(Instrumentation)

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Flowchart for calculation of CERs

All data shall be kept for 2 years after the end of crediting period or the last issue once of CERS
for this project activity whatever comes later.

The detailed calibration testing and maintenance procedure shall be prepared by Instrumentation
Deptt. and reviewed by CDM Manager based on agreement with gas supplier, equipment
manufacturers recommendation and national & international industries standards.

Thus it is felt that the plant is well equipped for maintaining the Monitoring Plan for verification
as per PDD. Plant already has a clearly defined and an Integrated Occupational Health, Quality,
and Environment Improvement system in place which has been certified by DNV under OSHAS
18001. This includes ISO 14001 for Environment Improvement and ISO 9001:2000 (Quality
Management System).
Daily collection of data like feedstock
flow, Urea production
Collection of Supplier quality certificates,
invoices on daily, fortnightly basis as
applicable
Calculation of CERs
Review of CERs during Monthly CDM
Review meeting
Data Storage Data Storage
Procedure
Review Meeting
Procedure
Data Storage
Finalization of CERs
Instrument
calibration
procedure &
schedule
Disparities in
results

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B.8 Date of completion of the application of the baseline study and monitoring
methodology and the name of the responsible person(s)/entity (ies)
>>
Date baseline study and monitoring methodology completed: 20/08/07
Persons completing baseline study and monitoring methodology: K.M.Tandon as per
Annex 1.

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SECTION C. Duration of the project activity / crediting period

C.1 Duration of the project activity:

C.1.1. Starting date of the project activity:
>>
Start date has been taken as the date of ordering of the first equipment for the project and is 01/
10/ 2005. This is substantiated by Annexure -29 ie the Letter of Intent issued to the, M/s Rizzi
International,Italy.

C.1.2. Expected operational lifetime of the project activity:
>>
20 Yrs

C.2 Choice of the crediting period and related information:
>>
A fixed ten-year crediting period has been chosen

C.2.1. Renewable crediting period
>>
Not applicable

C.2.1.1. Starting date of the first crediting period:
>>
Not applicable

C.2.1.2. Length of the first crediting period:
>>
Not applicable

C.2.2. Fixed crediting period:
>>
Chosen crediting period

C.2.2.1. Starting date:
>>
31/10/2005

C.2.2.2. Length:
>>
10 years


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SECTION D. Environmental impacts
>>

D.1. Documentation on the analysis of the environmental impacts, including trans-
boundary impacts:
>>
SFC-Kota, being an ISO 1400 company since 2000, has a certified and robust Environment
Management Process in place. The environment targets are met by consistent evaluation of the
impacts and mitigation measures. This has resulted in continuous demonstrated improvement in
all aspects of environment performance.

The possible impacts of the project were informed to Government of India for grant of Consent
to Establish the project modifications under the provisions of Air (Prevention & Control of
Pollution) Act, 1981 and Water (Prevention & Control of Pollution) Act, 1974 of Govt. of India.
The project was approved and the Consent to Establish the project was received from
Rajasthan State Pollution Control Board (RSPCB) vide letter F.12(21-31) RPCB/Gr I/3690 dt
10.3.05. (Copy attached as Annexure - 35) and Consent to Operate vide F.12(21-51) RPCB/Gr
I/843 dt 19.9.08 Copy attached as Annexure -36)

The possible impacts due to the project activity have been analysed and are discussed as under:

Impact on SO
2
Emission:

The sulphur content of NG is expected to be lower than 5 ppm(wt) which is much lower than
naphtha (50 ~100 ppm wt) and therefore, the NG use results in far too lower sulphur dioxide
emissions to the atmosphere compared to the naphtha-based operation.

Impact on CO
2
emission:

The naphtha has high carbon to hydrogen ratio of 5.45 and its use as feedstock for ammonia
production results in surplus CO
2
gas production .In the existing system, surplus CO
2
is gas
vented to the atmosphere. Carbon-Hydrogen ratio (CHR) for NG is 3.01, which is much lower
than Naphtha (5.45). No surplus CO
2
is generated while processing of NG. Also, CO2 released
through flue gases is reduced as hydrogen rich gas is burnt I the reformer furnace. Hence release
of CO2 atmosphere is reduced when operating with NG.

Impact on water pollutants:

There is no impact on water pollution to the water quantity and quality due to the project activity.

Impact on solid waste generation:


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The solid catalyst waste generation will marginally reduce when operating on natural gas as
catalyst in naphtha treatment section will not require replacement.

Impact of Noise pollution :

There shall be no change in the noise pollution which is well under the prescribed norms at
present.

Others:

The impact on environment during construction phase is felt as minimal and of temporary nature
and does not affect the environment.

Moreover, new equipment and modern operation and emergency control system have been
installed which are more sophisticated and therefore even less likely to cause any adverse
environmental impact in future.

Thus, the net impact of the project activity on the local ecology and fauna, flora is felt to be
positive. Hence it can be concluded that the project shall impact the local environment in a
positive manner.

This is also corroborated by the host country approval to the project activity received vide letter
F.No./4/21/2006-CCC dt. 3.4.2007) which confirms that project contributes to the sustainable
development. (Please see annexure 6.)

Environment Monitoring Measures:

The company has voluntarily implemented ISO 14000 system for continuous environment
improvement since 2000. The company has well qualified staff for monitoring of the
environment pollutants. The above pollutants shall continue to be monitored responsibly with
help of the above system. The system is audited by reputed external consultants once in a year
and regularly by in-house audit teams as per the agreed schedule with external consultants.

During the operation of the project activity, a yearly consent will be obtained from the Rajasthan
Pollution Control Board (Government of Indias environment monitoring agency) for air and
water pollution. The limits stipulated by this government agency will be monitored as part of the
existing established procedure and their compliance reported as part of normal routine
verification for the entire fertiliser plant. The representatives of this government agency shall
also visit the site and take the samples at his discretion for independent analysis of the
environment performance as per the existing laid down government regulatory norms.

D.2. If environmental impacts are considered significant by the project participants or
the host Party, please provide conclusions and all references to support documentation of

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an environmental impact assessment undertaken in accordance with the procedures as
required by the host Party:
>>
The environment impacts were not considered to be significant and detailed Environment Impact
Assessment (EIA) was not required under the provisions of EIA Notification rules S01533 ( E)
dated 14.9.2006 under Environment (Protection) Act, 1986, Govt. of India. As per the EIA
Notification rules, the EIA is required only for the large grass route projects and the above
project, being a small retrofit within an existing utility, does not require EIA.


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SECTION E. Stakeholders comments

E.1. Brief description how comments by local stakeholders have been invited and
compiled:
>>
For the purpose of the project activity, local stakeholder consultation meeting was held at
Shriram Training Centre, Shriram Nagar, Kota, Rajasthan, India on 27.10.2006. The agenda of
the meeting was to discuss stakeholder concerns on proposed Clean Development Mechanism
(CDM) project of Feedstock Conversion from Naphtha to Natural Gas at SFC-Kota Urea
complex. Elected representatives of local population, activists of local political parties, NGOs,
representatives of nearby schools, local contractor, residents of nearby localities, local business
men, shopkeepers, head of a nearby religious place, etc were identified as local stakeholders and
invited for the meeting. The invitation was published in local language newspaper (attached as
Annexure 33). People were also contacted through either postal letters or through personal,
telephonic contact.

During the meeting, the objective of the meeting was explained and agenda circulated. The
senior representative of Shriram Fertilisers & Chemicals explained the proposed project of
Feedstock Conversion and its impacts on local community, global warming, the working of the
CDM and Kyoto Protocol and the process of obtaining and trading of CO2 credits.

Subsequently, various concerns from people were solicited and addressed. Participants were also
provided with project documentation at the meeting venue to go through the documents. Shriram
Fertilisers & Chemicals has been operating its Kota complex since last 40 years and the local
stakeholders viewed the company with trust and confidence. There was an agreement that the
proposed project is a beneficial project from the sustainability point of view. The detailed report
of the Stake holders meeting is attached as Annexure 37.

Separately, as a part of formal process for obtaining project clearance, the project was also
reviewed by local Pollution control authorities (Rajasthan State Pollution Control Board) and
Consent to Establish provided by them. The drawings and the layout of the project were also
reviewed and approved by Government Factory Inspector and Boiler Inspector as per normal
statutory regulations.

E.2. Summary of the comments received:
>>

The local community considers the project positively and till date no negative comments (formal
or informal) have been received by the SFC- Kota Management for the Project Activity.

Most of the discussions during stakeholders meeting were held on topics of natural gas usage
and the impact of project on local community. It was explained that Natural gas is environment
friendly feedstock and its use shall reduce CO2 emission from the plant, thus leading to lower

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global warming. SO2 shall reduce due to lower sulphur content of NG vis--vis naphtha. The
project shall not lead to any change in quality and quantity of water effluent as they remain
unaffected by the change in raw material. In fact, there shall be a marginal reduction in
generation of catalyst wastes.

Safety of natural gas pipeline was also discussed. It was explained that Natural gas pipeline is
buried 2 mtr below the ground surface. It is being designed as per latest international codes by
Canadian company, Veeco International and being built by Gas Authority of India Ltd (GAIL), a
leading Indian government company in this field. The pipeline construction and operation shall
comply with guidelines of Oil Industry Safety Directorate (OISD), which is Govt. of Indias
nodal agency for safety in the petroleum and natural gas sector.

It was also explained that with laying of line upto the SFC plant, GAIL is also planning to extend
the pipeline for the plant for supply of Natural gas to Kota city for domestic and industrial use.
This can reduce the automobile pollution and boost industrial activity in the region, with
consequent economic benefits.

E.3. Report on how due account was taken of any comments received:

>>

There was agreement during the meeting that the proposed project is a beneficial project from the
sustainability point of view. All apprehensions of the stakeholders were addressed to during the
meeting itself.

No formal or informal adverse comments have been received from local stake holders.

As per UNFCCC requirement the PDD will also be published at the Validators / UNFCCC web
site for public comments.

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Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY

Organization: Shriram Fertilisers & Chemicals
Street/P.O.Box: Shriram Nagar
Building: -
City: Kota
State/Region: Rajasthan
Postfix/ZIP: 324004
Country: INDIA
Telephone: 0091-744-2480991-98
FAX: 0091-744-2480136, 2490296
E-Mail: -
URL: www.dscl.com
Represented by: -
Title: Vice President
Salutation: Mr.
Last Name: Tandon
Middle Name: M
First Name: K
Department: Fertiliser
Mobile: +91-9829231013
Direct FAX: +91-744-2480195
Direct tel: +91-744-2480195
Personal E-Mail: [email protected]


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Annex 2

INFORMATION REGARDING PUBLIC FUNDING

The project has not received any public funding.


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Annex 3

BASELINE INFORMATION

This section has been left blank on purpose


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Annex 4

MONITORING PLAN

1. INTRODUCTION :

This document shall serve as Monitoring Plan for CDM Project related to Feedstock
Conversion of Shriram Fertilisers & Chemicals, Kota. The document provides
guidelines for collection of data, calculation and reporting of CERs as per the
requirements of approved methodology AM 0050, the PDD for the CDM project and the
guidance presented in validation manual. It also describes organizational structure and
management system to be implemented by SFC Kota upon CDM project registration in
order to ensure consistent monitoring, calculation & reporting of CERs.

If necessary, this plan can be updated and adjusted provided such modifications are
approved by DOE during the process of validation and / or verification.

2. RESPONSIBILITY OF SFCs CDM MANAGER :

Subsequent to the registration of the Project, SFC management shall designate a senior
personnel as CDM Manager. CDM Manager shall be fully responsible for further
developing and implementing the Monitoring Plan as envisaged in this document and
coordinating all activities related to Verification process.

3. DESCRIPTION OF DATA REQUIRED TO BE MONITORED :

Data required to be monitored as per monitoring plan shall be in accordance within
requirements of AM0050, PDD 0050 and as under:

For Project Emission:

Parameter Unit Source Frequency
Feed NG Consumption NM
3
/Hr FIC 2201 in plant,
integrated for the day
Daily
Fuel NG Consumption NM
3
/Hr FIC 2103 + FI 2210 in
the plant, integrated for
the day
Daily
Total NG Consumption NM
3
/Hr FI 2101, integrated for
the day
Daily
NG Receipts MMBtu
& SCM
Suppliers Invoice Fortnightly
NG Composition % Supplier Reports Fortnightly
Net Calorific Value Kcal /
SCM
Suppliers Joint Ticket /
Invoice
Daily / Fortnightly

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Feed Naphtha
Consumption
M3/hr FRC 201 in plant,
Daily
Fuel Naphtha Consumption M3/hr FRC 204 in plant,
Daily
Naphtha Receipts MT Suppliers Invoice Monthly
Naphtha Density gm / cc Suppliers Test
Certificate to be cross
checked with lab records
For each naphtha
rake
Net Calorific Value Kcal /
kg
Suppliers Test
Certificate
Monthly
Urea Production MT/D Plant Daily
Ammonia Production MT/D Plant Daily

The data shall be provided by Ammonia plant except for that related to invoices and
supplier test certificates, which shall be provided by Fert R & D Department.

4. ORGANISATIONAL STRUCTURE AND PROCEDURES

The plan has been designed to separate data collection & calculation activities.
Spread sheets shall be used to collect the data. Separate spreadsheets shall be used to
calculate CERs.

The organization structure for CDM Project activity shall be as under:

Prior to the registration of the project, The Vice President (Fertiliser) of SFC Kota
shall issue a formal office order authorizing the CDM Manager to implement the
Monitoring Plan as envisaged in PDD by coordinating with various other
departments.

Vice President
(Fertiliser)
Senior Manager
(Ammonia Plant)
Asst. Engineer
( Fert R & D)
CDM Manager
Dy. General Manager
( Fert. R & D)
Dy. Manager
( Amm / Urea Lab)
Asst. Gen. Manager
(Instrumentation)

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All the department heads shall ensure compliance with the requirements of PDD and
monitoring plan.

They shall adhere to the laid down protocol procedure and processes in relation to
CDM Project activities by various departments to resolve all conflicts, discrepancies,
mistakes in the plan in consultation with Vice President (Fertiliser).

5. CDM JOB RESPONSIBILITIES :

a) Vice President (Fertiliser) :

Implement the organisation structure, issue office orders authorizing CDM
Manager to implement the Monitoring Plan as per PDD. Approve CERs during
monthly review meetings

b) CDM Manager :

Direct the Ammonia, Instrument and Fert R & D departments to conform to
Monitoring Plan and data processing requirements as per PDD. Monitor data
and ensure data availability whenever required. To ensure reliability of data
taken and implement corrective action whenever required. Arrange for the
training of all the concerned personnel associated with the CDM activities in the
plant. Review the calculated CERs and submit them to DOE. Coordinate with
DOE during verification processes. Assist Vice President (Fertiliser) in resolving
conflicts related to CDM Project activities.

c) Ammonia Plant :

Provide data related to plant as per the monitoring frequency provided in PDD
and in a standardized excel sheet format. Ensure calibration of measurement
devices and reliability of data.

d) R&D (Fertiliser) :

To collect data related to Suppliers certificates and material invoices. Review
data supplied by Ammonia Plant as per the monitoring plan and report non
conformance with PDD and monitoring plan. To calculate CERs based on data
collected from Ammonia plant, PDD and other sources, if required.

e) Instrumentation Deptt.

To calibrate the designated flow meters in Ammonia plant as per the frequency
and procedure based on suppliers recommendation and general practices in
order to ensure correct readings. To witness calibration of external party like NG
supplier.


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page 83

6. IMPLEMENTATION PROTOCOL

Prior to the registration of the project, CDM Manager shall, based on the Office order for
implementation of the Monitoring Plan of CDM projects, convene the meeting for
initiating the efforts for CER calculation and verification.

Based on the interaction with various departments, he shall finalise the formats,
protocols / procedures for data review, calibration schedules, data storage etc. Upon
registration of the project, the data collection and CER calculation activities shall start as
per the Monitoring plan and the flowchart given below.

Ammonia plant shall provide all data pertaining to consumption of NG, consumption of
naphtha as feed and as fuel used in the plant. The hourly recording of data will be done
by shift operators that will be checked and verified by the shift in-charge after every 8 hr
shift and by the section in-charge at the end of each day. This data will be compiled as a
daily report in the formats and sent to Fertiliser R & D. The data shall be stored within
Ammonia plant as per existing ISO 900 practices

Fertiliser R & D shall be calculating CERs based on the data from Ammonia plant as
well as from suppliers already with it.

Review of the CERs calculated during past one month shall be carried out by 15
th
of
every month in a meeting with Vice President in chair. During the review, Fertiliser R &
D shall put up the CER calculation as well as the supporting data for approval. In case
any discrepancies are observed, same shall be rectified and put up again for the review
within 5 days. Otherwise, CERs calculated shall be approved and the data including
supporting documents shall be stored with Fert R & D for protected storage and retrieval
when required for verification audit. The monthly reports will also be sent to the
consultant (DSCL Energy Services Company Ltd) for estimation of monthly emission
reductions.

7. GENERAL NOTES :

Before the start of crediting period, CDM manager shall review the protocols
and formats for data collection and calculations.

All data shall be kept for 2 years after the end of crediting period or the last issue
once of CERS for this project activity whatever comes later.

The detailed calibration testing and maintenance procedure shall be prepared by
Instrumentation Deptt. and reviewed by CDM Manager based on agreement with
supplier, equipment manufacturers recommendation and national &
international industries standards.


CDM Executive Board

page 84

In case of failure of any instrument, necessary action plan shall be prepared by
CDM Manager and approved by VP (Fert.).

FLOWCHART FOR CALCULATION OF CERS -
Daily collection of data like feedstock
flow, Urea production
Collection of Supplier quality certificates,
invoices on daily, fortnightly basis as
applicable
Calculation of CERs
Review of CERs during Monthly CDM
Review meeting
Data Storage Data Storage
Procedure
Review Meeting
Procedure
Data Storage
Finalization of CERs
Instrument
calibration
procedure &
schedule
Disparities in
results

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